· Union body says reducing inheritance tax would be a “huge giveaway to the wealthiest” and would “starve public services of vital funds”
· Married couples can already hand down £1 million tax free to their children
· TUC poll show most voters are against cutting inheritance tax
Only 2% of estates in Wales would be affected if the UK Chancellor cuts inheritance tax at Wednesday’s Autumn Statement – according to new Wales TUC analysis published today (Monday).
The analysis of official statistics shows that of the 38,575 people who died in Wales in 2020/21 (the latest year for which figures were available) just 790 estates had to pay any inheritance tax at all.
The analysis shows that people in London and the South East would be – by far – the largest beneficiaries from cutting inheritance tax.
Estates in London and the South East are three times more likely to pay inheritance tax than Wales.
But even in the capital (93%) and the South East (94%) nearly all estates don’t pay any inheritance tax.
Generous inheritance tax system
Currently, most married couples can leave up to £1 million to their children tax-free.
Inheritance tax is only paid at 40% on assets and wealth above £1 million – and even then loopholes can mean that for some families no tax is paid on assets worth over £1 million.
The IFS has estimated that the wealthiest 1% would get half the benefit of scrapping inheritance tax, with an average tax cut of £1 million.
Very wealthy minority
The Wales TUC says cutting inheritance tax for millionaires would represent “a huge handout to the wealthiest” and starve public services of vital funds.
Most people in the UK either do not receive any inheritance, or pay no tax on anything they inherit – with just 4% of all estates paying any inheritance tax at all. The Wales TUC says abolishing inheritance tax would be a giveaway for “a very small, very wealthy minority”.
Public opposition
Wales TUC polling from earlier this year shows that a clear majority (60%) of the public are against cuts to the £1 million inheritance tax threshold – while just two in 10 say they want the tax lowered.
The poll, commissioned by the TUC and conducted by Opinium, revealed:
· Just two in 10 (20%) think that those who inherit over the £1 million inheritance tax threshold should pay less – 60% think inheritance tax should remain the same or be higher, including 62% of Conservative voters from the 2019 general election.
· Only 1 in 5 (20%) think the threshold for paying inheritance tax should be higher than the current £1 million for married couples – most (60%) think it should remain the same or be lowered, including 61% of Conservative 2019 voters.
“Levelling Down”
The Wales TUC says lowering inheritance tax would be “an act of levelling down” by the Conservatives.
Inheritance tax is set to contribute a hefty £7bn annually to the public purse, according to the latest OBR forecasts.
And IFS analysis suggests that tax revenue from inheritance tax will increase from around £7 billion in the current year to around £15 billion in a decade’s time.
Wales TUC General Secretary Shavanah Taj said:
“This week’s Autumn Statement is about political choices.
“At a time when people are struggling with the cost of living it would be obscene to give a huge tax cut to a very small, very wealthy minority.
“Virtually no-one is affected by inheritance tax in Wales, but if it is cut our public services will be starved of much-needed funding yet again.
“Slashing it would be an act of levelling down.
“The Conservatives have broken Britain, and they seem hellbent on making things even worse.
“It’s time for a reset. We need an economy that rewards work – not wealth.”
| [donate]
| Help keep news FREE for our readersSupporting your local community newspaper/online news outlet is crucial now more than ever. If you believe in independent journalism,then consider making a valuable contribution by making a one-time or monthly donation. We operate in rural areas where providing unbiased news can be challenging. |
