Scrapping inheritance tax ‘not electoral slam dunk’, says think tank
Conservative backbenchers have called for Rishi Sunak to abolish inheritance tax.
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Your support makes all the difference.Scrapping inheritance tax may not be a vote-winning strategy as three-quarters of people back some form of the levy, a think tank has said.
A survey carried out for Demos, a cross-party think tank, found that while 55% of people initially said they thought inheritance should be tax-free in general, the public was more supportive when asked about taxes on specific amounts of inheritance.
Voters were more likely to favour taxing higher inheritance that included a second home, financial assets or unearned wealth rather than savings that had been built up through wages.
Some 75% backed taxes on a specific amount of inheritance, with the median response putting the threshold at £300,000 – just below the current inheritance tax threshold of £325,000 and well below the £1 million threshold where most estates actually begin paying the tax.
Most people feel that some amounts of inheritances should be taxed and the majority of the public would like to see the thresholds for paying tax on inheritance lowered from where it is now, not increased
The findings, published on Wednesday, come shortly after a group of backbench Conservatives including former prime minister Liz Truss and former chancellor Nadhim Zahawi called for inheritance tax to be scrapped altogether.
About 50 Tory MPs backed calls to abolish the tax, with Mr Zahawi saying it was “morally wrong” to take someone’s assets after death.
But the Demos survey found just 21% of people thought all inheritance should be tax-free, and support for taxing at least some inheritance was consistently around 75% across the political spectrum.
Dan Goss, researcher at Demos, said: “If Rishi Sunak is serious about cutting inheritance tax, our research shows he might want to reconsider.
“Far from being an electoral slam dunk, cutting or abolishing inheritance tax is based on assumptions that do not stand up to scrutiny.
“Most people feel that some amounts of inheritances should be taxed and the majority of the public would like to see the thresholds for paying tax on inheritance lowered from where it is now, not increased.
“When presented with a variety of options, Britons are often much more receptive to the idea of taxing inheritance.
“As we enter a new age of inheritance with over £100 billion being passed on every year, we should have a grown-up conversation with the public about how we balance people’s desire to leave something to their loved ones with their values about what a fair society looks like.”
The Demos research, which surveyed 2,000 people in December 2022, also found that people who did not expect to pass on much wealth were more likely to oppose inheritance tax initially, despite being least likely to pay it, but when asked about specific amounts were more likely to favour lower thresholds for the tax.
People expecting to give or receive £200,000 or more in inheritance typically thought the threshold should be about £500,000, while those expecting to give or receive between £1,000 and £5,000 thought the threshold should be just £50,000.
Homeowners were also more likely to back a higher inheritance tax threshold than renters.