Inheritance tax – to be or not to be
Through Legal futures Partner Tower Street Finance
Following Boris Johnson’s announcement of a Â£ 12 billion a year tax hike to cover health and social care, expert attention shifted to wealth taxes and they gave their opinion on what “could” and “should” happen.
This has put the estate tax in the spotlight with conflicting views on what the Chancellor’s next steps should be.
As the opposition and unions urge the government to tax wealth, a leading economist has said the inheritance tax should be eliminated altogether.
Julian Jessop of the Institute for Free Market Economic Affairs said he was not a fan of the tax because he didn’t see why someone should pay more tax because he had passed away.
He said: âPeople should be free to build assets and pay taxes on them as they go. The idea that you should be paying a tax bill because you died – I don’t really see any justification for that. My point of view is that it should be abolished.
The opposite opinion came from Ed Smith, head of asset allocation research at Rathbones, who said the level of IHT should be increased for the numbers to add up as the population of retirees grew faster than that of working people. For this reason, he said the chancellor could not continue to depend on income tax.
He said: âThe classic argument against inheritance tax is that they haven’t raised a lot of money in the past, but the amount of wealth that is about to be transferred over the next few years. decades is unprecedented in the post-war era. “
Dicky Davies of Tower Street Finance said: âWe read conflicting reports on a daily basis about what could happen with IHT, but what we do know is that even though it exists in its current form, paying the bill is a problem that exists for many executors and personal executors. representatives.
âWe often call it a chicken-and-egg situation – the probate process can’t end until the HMRC is paid, but people often can’t foot the bill while the process goes. The probate has not been completed and the proceeds of the estate have not been distributed.
âOur IHT loan has helped our partners provide this additional service to their clients, helping them ‘unlock’ problem areas that are rich in assets and poor in cash. It also speeds up the whole process, which saves time and money.