Inheirtance tax of 10%

I think you're referring to the Laffer curve. The idea that lowering tax rates encourage people to work harder, and also to not avoid tax, so the total tax take goes up.

It's a nice idea but has been comprehensively demolished, it's simply not true, it doesn't happen.

Tax rates went up under the Tories (mainly due to higher vat rates and also fiscal drag, where the boundaries between tax rates don't go up with inflation). Under your suggestion that should mean the total tax went down... It didn't. Total tax as a percentage of GDP hit it's highest ever level under Sunak to be fair to the Tories it's scheduled to continue rising under labour.

The reason for this is twofold (1) GDP growth under the Tories was terrible. The economy barely grew due to their policy of austerity. And the disaster of Brexit of course. And (2) we have an ageing population. 20% of government spend goes in the state pension and 25% on the NHS which are both related to the elderly. Bothe of these are paid out of current taxes and are rising fast. Benefits to immigrants and unemployed "scroungers" are tiny in comparison.

We basically need more working age people paying taxes to finance these 2 big drains. As women in the UK are having 1.5 children we need to significantly increase immigration to compensate. Genuinely loosening immigration controls would be the most sensible thing Burnham could do for the economy. But of course he won't because of all the Reform loons.

I’m more in favour of scrapping IHT and taxing the transfer of all assets between people (CGT) so if a house is transferred to anyone other than a spouse, it is taxed for any capital gain. That any money transferred after death is subject to income tax at the marginal rate.

But…all gifts of assets and cash eg from parent to child, should be similarly taxed as well, with a reasonably generous annual, or lifetime allowance.

This is because at the moment, if someone owns 3 properties and sold them a day before death, there would be CGT on the gain for two, then IHT. One day after, all the CGT is forgiven.

For most people their main asset is their home and they need it to live in. They can’t gift their children. The rich people have enough wealth to gift children and keep enough money.

So excepting between spouses, if you bequeath assets to anyone other than your spouse, it is taxed as CGT, or extra income tax by the recipient. If you gift money or assets to anyone other than a spouse throughout you life, CGT or extra income tax is paid.

we are about to have (and have started) one of the biggest movements of wealth between generations. It will very much widen the divide between the haves and the have nots - this is a bad thing on a societal basis. It doesn’t mean children won’t get any help from parents, just that society will tax that help and spread it about.

there would be a considerable change in amount of paperwork to be submitted if all estates (except the very small) paid 10% IHT.

@Philgooglemail

It's not illegal, and would take concerted agreement across the governments of different countries to address. Being part of a big powerful block like the EU may make it easier to put rules in place to reduce such practices, but the clever people of the UK decided against that.

Irrelevant point because the EU hasn't tackled it.

Will they be exempt. We don’t know

Sorry for being dim, but I don't understand what people are saying about removing the the 7 year rule?
Do they mean someone's estate would simply everything they possess on the day they die? Regardless of when and what they gave away previously?

And if not, what would the definition of a person's estate be?

Yes exactly this - legal tax avoidance costs billions, vastly more than the scapegoats various political parties and media outlets prefer to point the finger at.

No, because very small estates would be exempt from probate just as they are now.

Everyone else has to apply for probate just like they do now, and so nothing will change.

Well, not by definition - every international company is registered somewhere so being international doesn't mean non UK automatically.

There are obviously British multinationals who dodge UK tax www.taxwatchuk.org/the-great-pharma-tax-giveaway/
as well as non UK multinational corporations which take incentives from the government and are enticed with tax funded investment in infrastructure but are registered in low tax countries purely for tax avoidance.

i think it makes sense & people will
likely try to avoid it less so more will pay.

Google (alphabet now) is an international company that has a UK based subsidiary. It's UK subsidiary pays taxes in the UK, and I'm sure their tax computations are squeaky clean.

However by virtue of being an international company they can set up their business in a tax advantageous way. So they also have a subsidiary in Bermuda that owns their intellectual property, other Google subsidiaries like the UK one pay for the use of that IP, reducing taxable profits in the UK, and increasing profit in Bermuda where there is zero corporation tax.

A report in the guardian estimated that in 2017 profits of $23bn were shifted to Google's Bermuda subsidiary some of these profits were made in UK, so this is a very big deal.

It's not illegal, and would take concerted agreement across the governments of different countries to address. Being part of a big powerful block like the EU may make it easier to put rules in place to reduce such practices, but the clever people of the UK decided against that.

10% on everything and no allowance?

I'm not sure trying to squeeze the same people is a good idea. Get more people paying tax. More companies paying tax.
Less people needing support.

Brilliant idea. It would stop a lot of people leaving the UK to avoid IHT.

The lower the tax rate, the higher the revenue as it is not worth trying to avoid.

I assume that there would be anti-avoidance laws to stop this like there are for other taxes.

@UlyssesandThatBookYourAuntieWrote International companies are not, by definition, registered in the UK. They pay their taxes in other jurisdictions.

So similar to the overseas aid budget which Reform types can't stop being obsessed with?

Negligible or not negligible?

Obviously tax dodging by international companies is a vastly bigger source of lost tax income, which is never targeted meaningfully.

Only 5% of estates are currently liable to pay inheritance tax given the allowance plus nil rate residence band, this measure would make 95% of people worse off.

I get the impression that either a lot of people are unduly worried about a scary 40% number that won't actually affect them, or the 5% who are affected are very vocal or able to make this a popular talking point.

This would be a brilliant and fair policy, which means there's zero chance Labour will bring it in

Or maybe £15k as at the moment you don't need probate for estates under that in a lot of cases?

I think it is a good idea, but only if all loopholes to minimise IHT are firmly closed.

Surely this is exactly what shouldn't be possible!

I'm absolutely not against 10% or more inheritance tax where the inheritance is going to independent adults (or children not dependent on the deceased).

Obviously exemptions need to remain for spouse/ partner and dependent children resident at the same address as the deceased though! Otherwise there'll be lots of families out on the street needing rehousing!

Also the tax (at least on primary residence and lower value estates) needs to be payable from the estate not up front. Many, many people who are left 50% of their parents' house won't be able to find 10% of the value to pay before the house is sold - that money should be paid, I have no problem with that or indeed a 25% tax in that situation provided the heir isn't a dependent child or spouse, but from the sale.

Indeed! HMCTS were struggling to cope when my dm died in 2024: they would not answer any queries unless you had been waiting more than 16 weeks since application. Complete shambles.

The person who dies in their 40s with a family would presumably leave their estate to their spouse or partner, which under the current rules is a tax-free transfer.

There would be a huge administrative burden attached to a 10% charge on everything. Sounds like a disastrous idea

If they had £9 million they had ample time to give some away and still keep enough for possible care fees.

IHT is a tax on hoarding. Don't hoard, and you'll pay much less.