A review of inheritance tax released by the government today illustrates why the tax is ripe for reform. The Office of Tax Simplification highlighted how a number of features of inheritance tax, including some that benefit the very wealthy, are hard to justify.
Responding to the review, Robert Palmer, Executive Director of Tax Justice UK said: "Inheritance tax is broken. The public dislike it and the very wealthy can get away with not paying it. This review has pointed to a number of features of the tax which are hard to justify,
for example that no tax is due on shares on the AIM stock exchange. However, we need a more ambitious reform agenda to make inheritance tax work properly.”
Tax Justice UK’s recent report into inheritance tax reliefs found that a small number of the wealthiest families in the country are sharing up to £666 million a year in inheritance tax breaks on agricultural and business property. The Office of Tax Simplification pointed out that these reliefs will cost £5.85 billion over the next five years but due to its limited scope, the review stopped short of suggesting major reform.
Our report on inheritance tax 'In Stark Relief' recommends: