Brexit Party Pledge To Abolish Inheritance Tax
Nigel Farage’s Brexit Party has announced its first manifesto pledge, beyond anything Brexit related, this week. Richard Tice, the Brexit Party’s Chairman, promised to abolish inheritance tax in its entirety.
The Chairman of the Party believes that tax on death is ‘mean, wrong-headed,’ causing tension and discontent for less than 1% of all taxable revenue.
The pledge has been scrutinised following its announcement at the weekend with many alluding to the fact that the abolition would impact the richest 4%. Others highlighted the irony in a Party claiming to represent the will of the people and standing against the elite, actually pledging to help those they oppose.
Tice also claimed that the concept of inheritance tax has created a cynical system of legal experts helping the rich retain their wealth whilst suspicious civil servants scrutinise probate applications in the hope of finding additional taxable wealth.
Naive comments from Tice and the wider political landscape aside, the issue of inheritance tax plaguing more families at the current time is one in desperate need of addressing.
Following a decade of consistently rising house prices and favourable pension schemes, around 1 million people aged over 60-years are teetering on the precipice of an Inheritance Tax (IHT) black hole. Unbeknown to the estate owners, increasing equity in property has left a mass of people on the brink of IHT liabilities.
Whilst the Government predict that the number is loitering around £1 million people, NFU Mutual speculated that this figure is closer to 1.4 million UK estates valued at somewhere close to or in excess of the current threshold of £325,000.
Despite attempts to increase the threshold through an additional nil-rate band of £150,000 offered to singletons planning to gift their assets to their children and a combined couple allowance meaning that estates over £1 million can be offered tax free to surviving children, the Government are making record sums of money from IHT contributions.
Last year, the Government raked in over £5.3 billion in IHT alone. HM Revenue and Customs (HMRC) and OBR (Office for Budget Responsibility) forecasts have speculated that this figure will increase by an additional billion pounds over the next five years.
Estimates suggest that the Government will accrue a similar figure to 2018/19’s haul throughout this year.
By 2020/21 the forecast indicates that IHT contributions will increase to £5.4 billion, rising by £200 million to £5.6 billion the following year.
In 2022/23, this will rise to £5.9 billion and by 2023/24, the total will exceed £6.3 billion with many unsuspecting estates, lingering around the threshold, becoming huge contributors to this excessive haul.
Writing in the Express, Richard Tice, the Brexit Party’s Chairman, commented:
“What’s the point of inheritance tax? I only ask, because it is the most hated of all taxes, consumes so much time and energy, and generates relatively little for the Treasury that there must be a really, really good reason to keep it.
“The Brexit Party is ready to do away with this horrible tax once and for all.
“Ten years ago, the Conservatives flirted with raising the threshold to £1million so it affects less people – but they bottled it. Instead the opposite happened. As property values rose, so more – not less people – were dragged in.
“Our position is clear. We’d scrap it altogether.”
Whilst we can be fairly certain that the Brexit Party will not win enough seats to convert their pledges into reality, the political ramblings and attempts of Party one-upmanship help to expose a growing issue of middle income and low income estates being dragged into the inheritance tax threshold, creating tax obligations some families cannot afford.