IFS: scrapping inheritance tax hands £1mn to richest 1%
- On September 27, 2023
- By GrowthInvest Marketing
The wealthiest one per cent of individuals in the UK would receive almost half of the benefit of scrapping inheritance tax, according to the IFS.
The Institute for Fiscal Studies (IFS) found the current cost of abolishing inheritance tax would be £7bn, of which 47 per cent would go to those with estates of £2.1mn or more at death.
Those with estates of this value make up one per cent of the population who would benefit from an average tax cut of around £1.1mn.
While the more than 90 per cent of estates not paying inheritance tax would not be directly affected by such reform.
The findings were published today (September 27) by Arun Advani and David Sturrock, as a pre-released chapter called Reforming Inheritance Tax from the 2023 IFS Green Budget.
It comes in the same week that reports swirled that prime minister Rishi Sunak is considering a cut to inheritance tax ahead of the next general election, expected to come in 2024.
Current rules mean the tax is charged at 40 per cent for estates worth more than £325,000 with an extra £175,000 allowance towards a main residence.
However, married couples or civil partners can share their allowance meaning they could pass on £1mn to their children without paying the tax.
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