Labour should increase inheritance tax to 50 per cent

More revenue will be raised if IHT is reduced NOT increased!

At a whopping 40%, people are incentivised to take steps to avoid it via lifetime gifts, trusts, etc. If it were lower, people wouldn't feel they had to spend tens of thousands of pounds in specialist advice to reduce it.

I'd go the opposite way, drastically reduce the threshold to something like £100k and charge a flat 10% on the excess. That way, there'd be little incentive for people to pay tens of thousands for avoidance schemes.

I'd be for raising the minimum threshold, so average family houses (in expensive areas) were below the threshold, then I think it would be fair to raise the %.
So maybe £500 000 exempt then 50%. I am not sure if that would raise more or less money though.
I don't think that most people with estates to leave worked any harder than many who are under the current threshold.

Inheritance tax raises 6bn a year. Increasing the rate from 40% to 50% will raise £1.5 billion a year. It is a bad signal and raises very little.

Instead, start with ...
deport illegal immigrants.
deport foreign criminals and bar them from re-entry.
stop benefits to foreigners.
stop free NHS care to foreigners.
...

I find it really weird how unpopular inheritance tax is, when for almost everyone who dies (96% of us) our estates fall under the threshold so don't pay any inheritance tax, and as a general principle 'the rich should pay more tax as they can afford it' seems pretty sensible?

I wonder if it would be more accepted if hypothetically the thresholds were for the inheritee - for example if the rule was that no one can have an inheritance windfall of more than £100,000 before they started paying tax on it. I have no idea if that would bring in more revenue, but just thinking about the framing of it. All these people who'd get up in arms about poor Joe Bloggs who worked so hard all his life to leave his £1 million legacy to his kids only to have the state snatch some of it away. But would they be so fierce in defending the rights of his two adult offspring to inherit £500,000 each tax free (which they haven't personally raised a finger to earn). Just pondering.

What tax should we raise instead? Public services are on the floor.

I don't like inheritance tax but I like the thought of paying more income tax so Hugo amd Henrietta can inherit £1milliom each tax free even less!

Labour have just increased IHT by pulling pension funds into scope. It was already taxable as income to the recipient and now they are taking 40% off upfront too. So the majority of any leftover pension savings will be spent on the never ending list of things the public sector demand.

I imagine it's tipped a lot of people into retirement elsewhere. I'm going in a few months.

It's really hard to save enough for an unpredictable retirement length and so saving hard to look after yourself and family is now just another pocket to pick.

Like other posters I'm fed up of the wasteful public spending. The country is a leaky sieve. I would rather pay tax in a less wasteful country that lets my family keep my savings.

Me, me, me.

Have you ever used public services of any kind including the NHS? Do you expect roads to be fixed and parks to be built im your area?

Punish those who have worked hard their entire lives to provide for future generations. Gotcha.

The people I know with severe anxiety are not on benefits but can often be unable to work and are signed off sick, the support just isn’t there unfortunately.

I will be the only beneficiary of my parent’s estate and I agree that they should do this.

The amount you receive tax free is quite a lot.

Greed is a very unpleasant trait.

Can be are the operative words. How many of those on benefits for it are really too anxious to work at all. Wfh is all the rage now they don't even need to leave the house.

If they did this it would raise billions of pounds - while avoiding raising taxes on working people.

You do realise that this would mainly affect working people?

Anxiety can be debilitating, people off sick with it need help before being of any use in the workplace.

That’s a real shame and very unfair . Sorry too for your loss

I take it you are not set to inherit! Putting up taxes simply means that people will work harder to avoid said tax.

I think you have to be careful - if you punish those who’ve done well / are doing well, they can take actions such as leaving the UK or gifting money well before they die. Plus you disincentivise hard work and saving. Most people I know are working not only to get money for themselves, but to try to help their children in the future.

People do change their behaviour based on tax regimes.

Possibly abolish IHT but make property liable for CGT as they do in other countries.

If they want to raise billions then they should get people off the welfare state!
we are sick note Britain and I am fed up of paying for people to are effectively too lazy to bother with work.

Nice one OP.

What’s your next pearl of wisdom. Starmer is a good Prime Minister. Reeves is the best Chancellor we’ve ever had?

Lots of wealth in homes which have hugely gone up in value, goes on care home fees. Taking it in tax would mean gov (us) paying more care home fees.
I’ve posted this before and it seems to stop the ‘they’ should pay comments -we all should pay, a small increase in income tax, a small decrease in benefits, a small increase on inheritance etc etc etc

Me too. I worked really hard at school, at uni, at work. Currently doing 12 hour days in my job. I went through some horrific times as a lone parent but it never occurred to me that I would/could stop working. I pay huge amounts of tax already without taking anything back.

My father worked hard all his life. Ran his own successful business. He paid tax on nearly half of his earnings over the years. He paid tax when he sold his business. He paid tax on the interest he made on his savings. And when he finally goes, all his hard work will be taxed again. I think it works out something like he’ll have paid 90p tax out of every pound he earned.

Not everyone falls into IHT bands because they’ve bought a big house 50 years ago. And no, he can’t take it with him, but he’s already paid more than his fair share to a multitude of inept governments, why should his estate have to pay them even more?

The fact that it doesn’t affect you doesn’t make it fair.

I guess ending them being able to "pay how much tax they want" would be a good idea...

It really wouldn't.

Billionaires have yachts and private jets and houses in different countries.

That's what thousands of millions (which is what a billionaire is) gets you.

It's a staggering amount of wealth and people with it can pretty much pay as much tax as they want. They pay as much as they want now, and they would pay as much as they wanted if you tried to tax them more.

People in say the 1 million to 10 million wealth bracket. That is where you can get some money.