A YouGov poll commissioned this week by law firm Kingsley Napley shows a majority of the public now supports the complete abolition of inheritance tax (IHT).
The findings come in the wake of media reports last weekend that Rishi Sunak is said to be considering this as a Conservative party policy measure going into the next general election, along with a possible slashing of the current 40% rate at which IHT is levied in next March’s budget.
Interestingly, when Kingsley Napley / YouGov asked the same question in October last year, following Liz Truss & Kwasi Kwarteng’s so-called mini-budget, support for the total abolition of IHT fell slightly short of a majority, showing there has been a definite shift in public sentiment on inheritance tax.
This week’s poll also asked to what extent those surveyed would support the Government raising the threshold at which estates are required to pay IHT and checked the public mood on a potential increase in the levy. The results are shown in the tables below, with the figures in brackets representing the feedback when the same questions were asked in October 2022 (NB rounding has been applied):
James Ward, Partner and Head of Private Client at Kingsley Napley, said, “We know IHT is regarded by some as a double taxation given people already pay income tax during their lifetime and it is often described as one of the most hated taxes.
“It is hardly surprising that a strong majority of Tory voters would support the scrapping of the tax or at least raising the threshold at which it kicks in, because they are typically older and wealthier.
However, it is notable that a majority of Labour voters also support the idea of raising the threshold and oppose any increase in the 40% rate.
“The Labour party has ruled out a Wealth Tax should they come to power. We still await their official view regarding IHT, which I’ve long said is the UK’s equivalent of a wealth tax, however there are suggestions they may look to curb some exemptions. They may like to look at our poll results.
“Clearly IHT is not seen as a popular way to plug the gap in public finances, even among younger voters.”
Ward added, “Decades of house price growth across the UK has meant more and more households have fallen into the threshold for paying IHT because the nil-rate band has been frozen since 2009.
“However, the tax still only impacts 27,000 estates, mostly in London and the South-East, delivering less than 1% of the total UK tax take. The IFS recently calculated that this figure will likely grow in future even if the current IHT regime remains untouched due to inflation and rising property prices, albeit the property market has slowed significantly in recent months.
“Given IHT regime change is by no means certain, we recommend those in scope should continue with prudent estate planning.”