Proper news from Britain - News from Britain you won’t find anywhere else. Not the tosh the big media force-feed you every day!
- More people will pay tax when pensions are factored in, starting in 2027
More than half of people would do away with inheritance tax, according to research, despite only a small amount of households actually being liable for the tax.
As many as 54 per cent of people said they want inheritance tax to be scrapped, research from Kingsley Napley claims, increasing from 49 per cent who said the same a year ago.
Only around seven per cent of households are liable to pay inheritance tax, while the vast majority will fall below the threshold.
It comes as pensions are set to be included in inheritance tax calculations from 2027 under Labour plans, which will drag more estates into the net in future.
There are also rumours that Chancellor Rachel Reeves could seek to make further changes to inheritance tax in the upcoming Budget, including changes to how much people can give away tax-free.
Pensions alone could increase the size of an estate by hundreds of thousands of pounds.
Currently, inheritance tax is charged at 40 per cent on the portion of an estate whic is over over £325,000. However, homeowners can also make use of a £175,000 residence nil-rate band if they are passing on their primary home to their children or grandchildren, as well as sharing allowances between spouses.
This means that for married couples who own a home, the effective inheritance tax allowance stretches to £1million.
In comparison, figures from insurance agency NimbleFins show that the average net value of estates in the UK is just over the nil-rate band at £334,000.
Recent HMRC figures show that families have paid of £3.7billion in inheritance tax so far this year, an increasing of some five per cent from the £190million more than they did over the same period a year ago.
Unsurprisingly, an overwhelming majority of more than three quarters said they oppose an increase to inheritance tax, with 67 per cent saying they would increase the £325,000 allowance from which Inheritance tax is levied.
However, Kingsley Napley says just five per cent of people have taken advice to protect their estates from the levy, which could mean some find themselves with tax liability where they hadn't expected any.
James Ward, partner and head of private client at Kingsley Napley, said: 'Inheritance tax is effectively this country's wealth tax.
'It is only paid by 1 in 20 estates and whilst it is not a big money spinner for the Treasury in the scheme, it will no doubt be tempting for the Chancellor to squeeze more revenue out of these estates given her other pledges.
'Ms Reeves is unlikely to give two hoots about growing public opposition to IHT reform, despite the fact it is evenly spread in the voter community.
'The next election is also likely too far off for her to choose political over economic value in outflanking Farage.'