Matthew Elliott and James Frayne: "Abolish Inheritance Tax"

Matthew Elliott is Chief Executive of the TaxPayers' Alliance and James Frayne is Campaign Director

> Policy summary

The abolition of inheritance tax.

> Policy explanation

Inheritance tax is currently levied at a massive 40 percent on estates worth more than £285,000.  This currently affects around 1.5 million households. However, the Halifax have projected that by 2020 the tax will affect 4.2million households if the threshold continues to rise very slowly at a time when house prices are rising steadily.  The tax raises around £3.6 billion a year.

We believe that inheritance tax should be abolished.  It is not simply a tax on the rich (who can and do employ expensive accountants to come up with ways of dodging it) but affects ordinary families.  It is immoral because it forces people to pay tax on their possessions, having already paid huge amounts of tax throughout their lives.

> Political risks and opportunities

Contrary to what many in Westminster seem to believe, inheritance tax is an issue that concerns ordinary people across the country.  The polls clearly show that people are opposed to it.  According to a Populus poll for the BBC in March, people disagreed by 73-25 percent that inheritance tax was a "fair way" for the Government to raise money.  The poll also revealed that over 40 percent of those questioned had had to take inheritance tax into account recently in their own lives.  This reflects two things above all:

(a) people understand the obvious immorality of what amounts to "double taxation"; and
(b) it is not seen as a "tax cut for the rich" - ordinary people are being hit by it.

A commitment to getting rid of inheritance tax would show the Party understood the concerns of ordinary middle class families and that it its agenda was driven by wanting to make life "fair" for people. The abolition of inheritance tax should form part of a wider campaign to reduce the tax burden on families - a campaign which should (like the Lib Dems) commit to changing the thresholds at which the various tax rates kick in, and reducing the basic rate of tax.

Of course there is always some "risk" in announcing any policy.  Here the risk lies in what message abolishing inheritance tax says about the Party's priorities at a time when the Party has been actively and explicitly briefing that it was moving away from tax as an issue because it does not fit the new "brand".  It will require a significant change in the tone of the Party's campaigning and a clear briefing that the Party sees the issue of tax as an integral part of its compassionate conservative agenda - for
example, because "reducing the tax burden on ordinary families will make life easier for them and give them the money to spend on their own priorities".  On the issue of inheritance tax specifically, whilst the public are opposed to it anyway, it would be better if, like in the US, the tax became publicly known as the death tax (which is essentially what it is).

> Questions for ConservativeHome readers

• How should the issue of tax be brought back into the Conservative "brand" given the Party's clear briefing that it has been excluded?
• What other high-profile tax cuts should be announced at the same time to minimise the ability of the Government to say it will mostly affect Southern voters?
• Would it be better to begin the process of abolition by raising the threshold massively?

> Costs

It is always dangerous to get into the game of "costing" tax cuts because tax cuts have "dynamic effects" - they create a "rising tide" which boosts the economy as a whole and leads to revenues holding up (look at Australia, Ireland, the US and elsewhere).  However, on a "static" analysis, the
abolition of inheritance tax would "cost" £3.6 billion - the amount the tax currently raises.  Given that the European Central Bank estimates that the British Government wastes over £80 billion a year, the figure is relatively trivial.

Comments

[Louise]

In principle I agree with this policy, I'm just not sure that outright abolition as a first step is a tax-cutting priority.

I would increase the threshold substantially as a first step while also looking at other tax cuts, particularly tax on pensions - another double whammy tax. I would also, prior to abolishing inheritance tax, look at increasing the threshold before which income tax is payable - helping more of the lowest paid to keep their hard earned cash.

Not being an economics wonk, I'm afraid I can't back these suggestions with the fiscal reality, however I do think they bear further examination.

Having said that inheritance tax wouldn't be a priority, I will vote yes as in principle I believe it should go.

[Paul Kennedy]

It's a "yes" from me.

[Grand Central]

This is a very grown-up exercise isn't it?

Cost? £3.6bn.

How would you pay for it? " the figure is relatively trivial".

That won't stand up in an election campaign, it's laughable.

What's the point of this policy suggestion exercise if people coming up with the ideas aren't subject to the same constraints as real policymakers?

[Steve]

Absolutely yes.

I agree that it should really be within the context of a wider 'lower taxes' policy; but abolition of this tax would be bold and radical, it would simplify the tax system, would not be especially expensive AND could put Lab/Lib Dems on the back foot by ensuring they effectively commit to reintroducing it.

Fortune favours the brave.

[Steve]

It's the fact that the figure is so trivial that allows this to be done.

Note incidentally that even this figure is inflated due to currently sky high house prices.

How would you pay for it? Paid out of savings or a couple of pence on income tax if necessary. Better to have those working and earning paying once rather than paying a second time at death.

[Peter Littleton]

The abolishion of inheritance tax would;

1) Severely undermine social mobility by placing those people whose parents had, to some degree, been successful in life, at a marked advantage over those who hadn't. It would be far better to concentrate on reducing income and stealth taxes, which prevent people from normal backrounds from improving their position in life through endeavour. We should be a party for all people who want to strive to better themselves, not just for the home owning middle classes.

2) Would reduce SKIing (spending the kid's inheritance). This will become a greater phenomenon in coming years as try and avoid the tax. It is good for individuals, society and the economy, for people to be seen to be rewarded for a lifetime of hard work.

3) Mean even fewer houses would come to the market in coming years, as families would no longer be forced to sell their parent's houses. This would exacerbate the house price problem.

4) Increase family tension. Families already fall out frequently about inheritances. Cutting the pie even bigger would make this worse.

5) Force other taxes to go up to compensate. Abolishing inheritance tax would release large capital sums (not merely increase disposable income). Following modern trends, these sums are more likely to be spend on foreign homes than in the British economy. Therefore, income and stealth taxes would have to rise to cover the gap in revenue from inheritance tax.

Vote NO!

[David Robbins]

£3.6bn a year may be a “relatively trivial” amount in the context of overall Government spending, but the Party would still have to say where this money should come from.

The tried, tested and failed answer is to say we would pay for tax cuts by eliminating “waste”. Floating voters may well believe that the Government wastes much of what it spends. But why should they trust a different group of politicians who promise to give them something for nothing, all paid for by doing things more efficiently?

The alternative would be to finance the proposal through policies that generate some pain as well as gain (as Labour did in 1997 by promising a windfall tax and the abolition of the Assisted Places Scheme). This would make a promise to abolish IHT look credible, but could we not find a better and more politically attractive use for the money?

No one pays IHT on estates valued at less than £285,000 (rising to £325,000 by 2009). Median earnings are around £23,000 – or a little over £17,000 after income tax and NICs have been deducted. This means that, under the present system, someone can inherit an amount equivalent to around 16 years’ worth of take-home pay for an average employee without paying a penny in IHT. Should allowing such people to keep a larger share of their windfalls really be our top priority? Is this more important than building more prisons, hiring more police or implementing tax cuts that directly reward productive behaviour?

Less than 10% of estates pay IHT. You don’t have to believe that all of the beneficiaries are rich to concede that few will be drastically poor (except for indirect beneficiaries where the estate is left to charity). Rightly or wrongly, the original version of Built to Last says, “the right test for our policies is how they help the most disadvantaged in society, not the rich”. Pledging to abolish IHT fails this test and risks making David Cameron’s repositioning of the Party look superficial and insincere.

It is true that rising house prices, especially in the south-east, mean that large numbers of people own houses worth more than the IHT threshold and may therefore fear that they will have to pay a death duty. But planning constraints are already confining younger people to tiny homes with massive price tags. Meanwhile, many older people are set to retire on relatively meagre incomes while living in expensive houses. Against this background, do we want to use the tax system to encourage people to stay in their large family homes until they die so that they can bequeath these properties to their children free of IHT?

Finally and most importantly, what message would this policy send out about the Party? Not only would it be putting tax cuts ahead of other priorities, but its favoured tax cuts would reward people whose parents worked hard and saved hard rather than people who do so themselves. It is one thing for someone with John Major’s background to call for wealth to “cascade down the generations”, but how would this sound coming from Cameron or George Osborne? It is hard to think of another tax cut that could benefit these two individuals so much, while benefiting so few others. Labour would have a lot of fun working out how much they personally stood to gain.

[HF]

We need to have policies that appeal to the middle ground voters.

The complete abolition of IHT will not do that. It will send the message that we are focused on the rich as voters will perceive that the rich have most to gain from this.

What we should do is either raise IHT's starting point to the equivalent of 1997 or guarantee that it will rise in line with house prices.

There are other tax changes such as raising the starting point of income tax that are more important and would have far more appeal.

[clive elliot]

It is right and should be part of a huge tax simplification plan, which should include raising income tax threshold, merging N.I. with income tax and having a single rate, aboloshing stamp duty and capital gains tax, simplifying tax allowances, abandoning unnecessary benefits. All to be paid for by extending the scope of VAT.

Would have a dramatic effect of avoidance/evasion too.

Clive

[BG]

This is a sensible and reasoned proposal, and in no way "laughable". What is laughable, and what won't "stand up at an election" is a policy platform that omits any mention of tax, and merely mouths vague notions of "sharing the proceeds of growth".

Has nobody else noticed that the Conservative Party is steadfastly refusing to discuss tax - for its own wrongheaded reasons - while simultaneously making spending commitments all over the place. Take George Osborne's recent announcement on the Home Office.

We can't mention tax three years before an election unless everything is "costed", but we can commit to spending more than Labour on practically every policy area. How well do we think that will go down at election time coming from the Conservatives?

For the time being, perhaps we should be less paranoid about tax, and more concerned with how all these numerous spending pledges are being costed. As the TPA rightly says, "costing" tax cuts is more complex than any "static" analysis, but spending commitments are a different matter entirely - they rarely cost taxpayers less than they are projected to. Do we really believe that voters won't notice?

And all this from the "real policymakers" - I reckon we've heard enough from the real policymakers for the time being...

[Angelo Basu]

Perhaps one way of mixing pain with gain and demonstrating that the true motivation for a change in IHT is to help "ordinary" people would be to raise the threshold significantly but then increase the rate of IHT payable above the threshold.

Raising the threshold to say, £1m would mean that even in London the vast majority of estates would not get caught but at the same time the people who might complain about the tax rise would be unlikely to gain the sympathy of the public at large. It might not be possible to do this in an entirely revenue neutral way, but it might sit well in the context of other taxation policies designed to reduce the tax burden on the lower paid. However, this also looks far too redistributive and doesn't have the ring of even a "new" Tory policy.

Perhaps a better, less redistributive but nationally fair proposal would be to create a mechanism for linking the IHT threshold to the average house price in the area of the principal UK domicile of the testator (maybe estates worth over 150% of the average local house price). This would prevent there being a disproportionate tax windfall to any particular group in any part of the country. It might lead to the IHT threshold falling in some areas.

[Grand Central]

BG - if you support this measure how would you pay for it?

This is a pointless exercise if it is unconstrained, but if they're the rules then my policy suggestion is: abolish all taxes, double spending on public services and pay off the national debt.

[Peter Coe]

No, inheritance tax should not be abolished; it should be reformed to lift so-called "ordinary people" out of paying it.

I think we should also move to regional inheritance tax (and the same for council tax if we don't plan to replace it), because it's about time Government recognised that the costs of living in parts of our country are a quantum leap different from other parts.

Hence, whilst there will be very few households in Merseyside affected by inheritance tax - and those that are will, I suspect, inhabit homes of the size and grandeur the tax was initially devised to snare, in London inheritors of what are still fairly modest, ordinary homes, are caught in the trap.

Contributors here really shouldn't overlook the PR damage an abolitionist platform will do: in my view it will cause the Conservatives more damage than the NHS "queue-jump if you can afford it" policy at the last election.

If the party wants to get close to a majority it needs to be looking at policies that appeal not just to the southern seats it already holds but to the Midland and North-western constituencies it doesn't - talking about inheritance tax in that context is pretty much an irrelevance, anyway.

Finally, I have to say the philosophical basis of this idea stinks: it is the sort of thing that contaminates Conservative ideology: the message that Britain is overtaxed is an increasingly strong one - do we want to throw away our advantage on this issue just so we can reward aristocrats rather than, say, lifting the tax threshold so everyone benefits.

Oh, and just look at the fallout the Republicans in the US are experiencing by their recent crass attempt to couple a cut in estate tax to an increase in the (woefully low) minimum wage over there.

It's bad politics, bad philosophy, bad economics. But otherwise I have no problem with it!

[Gildas]

"3) Mean even fewer houses would come to the market in coming years, as families would no longer be forced to sell their parent's houses. This would exacerbate the house price problem."

Tragedy. Grieving families no longer forced to sell a much loved piece of *their* property to pay money to the state. We can't have that.

In fact, I'd say that that is the best argument in favour of scapping this pernicious tax. Vote YES.

[william]

IHT cuts economic activity, reduces tax take, and makes Britain uncompetitive.

At 40% we have an IHT rate that is double the world average for the tax, where it exists. In fact we have the highest rate in the world.

1. DISINCENTIVE. The tax stops people from accumulating wealth in the first place as what's the point in paying tax at around 60% (N Ins is 25% employer and employee plus income tax 40%) to retain assets to then pay 40% IHT. People focus on protecting the wealth level they have rather than aspiring to get a bigger IHT headache to deal with.

2. REDUCTION OF CAPITAL BASE. Every generation is stripped of its capital, so that the next one has to start from scratch. In other countries where wealth is not removed from the private and placed into the public sector, businesses are stronger, more productive and more likely to keep the better family members involved and keep growing.

In Britain, the brains leave the family and go to the City, where they can milk the financial system, giving big business all the advantages over smaller business. Germany's strength is its mittelstand where family businesses grow into bigger businesses, and where they keep their talent. Same in Italy.

If we had a more propductive, better invested small and middle sized business base, and we were less dependent on big companies in Britain, we would have a more diverse robust economy which was less dependent on consumption, where more talented people would build careers and businesses and reduce the power of big businesses to create monopolistic markets.

In countries where wealth is not illegal, private people create charitable foundations to give meaning to their wealth such as Bill Gates, Buffet and so on. In Britain they take out insurance policies, move abroad and waste all the energy that talent has created. Wealth is sucked into tax. It goes to fund VAT carousel fraud, Prescott's mistresses and all the plunder that fattens New Labour's cronies.

[Londoner]

We are talking 100 policies here and are only on policy no 3 - they would not necessarily be announced in this order, so I think this exercise will be useless unless we can judge proposals on their merits rather than just PR. I am sure lots of other policies in the 100 will be directed at the disadvantaged. If it's a question of another spending commitment of £3.5 bn, or indeed an appropriation of some of that "sharing of growth" which is going to go into tax cuts, then to me this is a high priority and absolutely right.

Apart from the fairness and double tax issue, it should be a Conservative aim for as many people as possible to have material resources/income from capital, rather than merely wages - this fosters independence, investment, less reliance on the State in adversity, greater possibilities for private philanthropy, less reliance on pensions in old age, etc - in short greater economic freedom for as many people as possible.

It is spurious to say that it will reduce housing supply - does the person who said this think that people will just leave the houses they inherit empty? In fact it provides the opportunity for more of us to keep properties in the family - circulating them between generations as required, renting them out when not - thereby creating continuity and local commitments. Regarding economic demand, it would probably mean less people paying high mortgages so might in time increase disposable income whilst at the same time preventing the tax proceeds being converted from private wealth into public current expenditure. At the top end, in time it would also mean the super-rich being more likely to keep more of their money in the UK.

Finally, it has never been a Conservative idea to prevent the middle rising towards the level of the most fortunate, just because everyone cannot rise. I want 80% of the people to have material independent wealth, not 20%. There will be other policies more directly appealing to the 20% who will still not have it.

Vote YES and when you have about 70 policies you can start thinking about balance, PR and indeed balancing the budget.

[Denis Cooper]

I'm voting NO to this policy, because I don't believe that it addresses the core problem with "inheritance tax" - ie that is not in fact a tax on inheritances, but a tax on estates, in other words estate duty under another, and misleading, name.

Apart from the administrative nightmare created for executors [eg my wife, at present] who must first pay the inheritance tax before obtaining probate and liquidating, let alone distributing, assets in the estate, the tax burden bears no relation to the number of beneficiaries who share the proceeds or to their personal circumstances - eg whether a beneficiary has already received a succession of large legacies, or whether he is disabled and has greater need of the money.

Therefore my proposal would be to reform the basis of inheritance tax, so that it was no longer a tax on the estate as a whole, but a tax on the legacy received
by each beneficiary, with each of us having an inflation-linked lifetime allowance for tax-free legacies, and with a range of special exemptions available. Not only would this be much fairer, it would also greatly simplify the task of the executor who would no longer pay inheritance tax before distributing the estate, with the responsibility for paying any tax transferred to each of the legatees according to their own circumstances.

It would also obviate the need for many of the complex schemes which are now being used to minimise tax. For example, it would no longer make any difference to the tax paid if children received part of their inheritance direct from the first parent to die, or all of it through the second parent - one of the glaring anomalies of the present system.

I don't accept the argument that inheritance tax is inherently "immoral because it forces people to pay tax on their possessions, having already paid huge amounts of tax throughout their lives." That's certainly one of my objections to Land Value Tax and council tax and other forms of wealth tax, but it doesn't apply in this case because the deceased who accumulated the estate, however they did that, isn't being taxed - it's the estate which is being taxed, and through that in effect the beneficiaries, but in an irrational and unfair way.

The hardest line is that many people who inherit have done nothing at all to earn that inheritance, and others who inherit nothing at all may be personally more deserving. I repeat, that is the hard line, one close to that openly adopted by Gordon Brown in the past when he said that all estates should "revert" to the State, and close to some others who believe in Universal Inheritance, see:

http://www.universal-inheritance.org/

and the article by Dane Clousten in the current issue of Freedom Today, see:

http://www.tfa.net/pdfs/40608.pdf

I don't accept that hard line, because I believe that it goes against the grain of human nature. It's perfectly natural and healthy for people to want to help their children or other loved ones, including passing on their property. We don't know how long we're going to live, or how much paid care we're going to need, so we don't know how much money we'll need during our old age and how much we can pass on earlier in life. If the state automatically swipes any surplus we leave then it discourages saving for old age.

However nor do I accept the John Major vision of "wealth cascading down the generations", which ignores the reality that poverty will also cascade down the generations. I believe that the passage of wealth between generations is a good opportunity for a modest re-distribution to ensure that with each generation there is something approaching a fresh start, with its members rising or falling on their own merits and on their own efforts rather than those of their parents.

Hence my proposal that there should still a mechanism to tax and re-distribute some of the wealth accumulated by one generation when it is passed to the next.

Perhaps the best and most acceptable use for the legacy tax revenues would be a dedicated educational fund, for example to provide university scholarships for the ablest school leavers, especially those from poor backgrounds who might otherwise be deterred from going on to university.

[Roy]

Taxation is the art of the politically possible against the economic disadvantages of the particular form of taxation.

Inheritance tax in the main taxes people who are inheriting their parent's house, an asset that has risen sharply in value over the last twenty years, has suffered no capital gains taxation (unlike every other form of investment) and which has no direct productive benefit.

In contrast, abolishing tax on corporate profits would improve productivity, competitiveness and future wealth. This should be the priority.

But, it is politically less attractive!

[Richard]

"1) Severely undermine social mobility by placing those people whose parents had, to some degree, been successful in life, at a marked advantage over those who hadn't.

That happens anyway. Inequality is the natural order of things. Penalising those who are successful is just spiteful.

"It would be far better to concentrate on reducing income and stealth taxes, which prevent people from normal backrounds from improving their position in life through endeavour. We should be a party for all people who want to strive to better themselves, not just for the home owning middle classes."

They're pretty important when it comes to marginals.

"2) Would reduce SKIing (spending the kid's inheritance). This will become a greater phenomenon in coming years as try and avoid the tax. It is good for individuals, society and the economy, for people to be seen to be rewarded for a lifetime of hard work."

Who are you to tell people what they should and shouldn't do with their money? If somebody leaves several billion to their children that is nobody else's business. I have better things to do than get worked up about someone giving their children lots of money.

"3) Mean even fewer houses would come to the market in coming years, as families would no longer be forced to sell their parent's houses. This would exacerbate the house price problem."

Maybe they don't want to sell their parents' house/houses? The idea that somebody should be forced via taxation to depart with their property sounds distinctly socialist.

"4) Increase family tension. Families already fall out frequently about inheritances. Cutting the pie even bigger would make this worse."

Do you have any evidence for this? Even if it's true family arguments are not the concern of the state.

"5) Force other taxes to go up to compensate. Abolishing inheritance tax would release large capital sums (not merely increase disposable income). Following modern trends, these sums are more likely to be spend on foreign homes than in the British economy."

So what if people want to spend their money abroad? The idea that this was bad went out with exchange controls. We are not economic nationalists.

"Therefore, income and stealth taxes would have to rise to cover the gap in revenue from inheritance tax."

Seeing as the ECB estimates government waste as being around £80 billion a year I think we could afford it quite easily.

[Wat Tyler]

IHT is an archetypal stealth tax. It's increased much faster than GDP or even taxes generally- in 1996-97 it was only £1.6bn, compared to £3.6bn now.

So it's a good candidate for the chop.

Of course, as others have said, many other taxes deserve to join it. In particular, income tax and NICs need drastic surgery- as I think the TPA has argued elsewhere, taxes on income are particularly "distortionary" in their effect effort and enterprise.

But we need to recognise such surgery will initially be very expensive. EG for the same £3.6bn static cost of ABOLISHING IHT, we could only increase personal allowances by £500pa. So the scope for clear unambiguous messages of intent is that much more limited.

Abolishing IHT outright would be a bold affordable move that would headline a much broader package of tax cuts and simplification.

[anonymousofdevon]

I have always thought that the simplest and least controverisal solution would be to allow a surviving spouse (or surviving registered civil partner) to carry forward the nil rate threshold of the first spouse/civil partner to die. The survivor would then have double the threshold (currently £285,000) to apply to their estate.
This would immediately obviate the need for most complex Will drafting and, at the same time, remove most estates from the inheritance tax trap.
It also avoids arguments over the abolition of the tax in its entirety or significantly increasing the threshold, which allow our opponents to score cheap political points.

[Deputy Editor]

In terms of marketing this idea, the cruder phrase of "Death Tax" has been immensely effective in the US.

[Steve]

I'm constantly amazed that so many people can argue for the rentention of a tax which if abolished tomorrow would almost certainly never be reintroduced; or to amend it to create an even more byzantine system.

We should be about lower taxes and tax simplification.

This tax raises peanuts, can be avoided easily by 'aristocrats/the rich' and falls disproportionately on exactly the type of voters we should be trying to attract - who have worked their whole lives, paid inordinate levels of tax throughout their lives and risk seeing a vast chunk paid back to the Treasury on their death.

The argument that somehow this 'doesn't affect people in the North or Midlands' is staggering in its naivity.

We should be bold on issues like this and yes of course, this cannot be considered in isolation. But amongst a whole range of policies (tax and other) designed to appeal to wide range of people, this is nothing other than a winner. And is true to Conservative roots.

Vote YES!

[Peter Littleton]

Richard, I see your comments on the 5 points in my earlier post, but I would just say this in response.

" Inequality is the natural order of things. Penalising those who are successful is just spiteful."

I agree, inequality is in the natural order of things. However, inheritance doesn't penalise the successful - it rewards their offspring. Meanwhile, the strivers and hardworkers without rich parents are penalised further through the other tax increases needed to pay for the IHT reductions.

IHT remains perhaps the principle weapon in a socially mobile society!

"Who are you to tell people what they should and shouldn't do with their money? If somebody leaves several billion to their children that is nobody else's business. I have better things to do than get worked up about someone giving their children lots of money."

The government tells us how to spend our money everyday by taking it away from us in income and stealth taxes. This is far more illiberal than using tax to encourage people to spend their money! It is easy to avoid IHT - just spend it. It is the illiberal taxes which would have to rise, were IHT to be scrapped.

"Maybe they don't want to sell their parents' house/houses? The idea that somebody should be forced via taxation to depart with their property sounds distinctly socialist."

Tax is used as a constant weapon to control behaviour - for example petrol duty, tobacco duty etc. IHT is much preferable because it doesn't actually affect the person whose money it is.

Remember - I'm not advocating the confiscation of all a family's wealth, merely the 40% over the threshold.

"5)IHT would force other taxes to go up to compensate. Abolishing inheritance tax would release large capital sums (not merely increase disposable income). Following modern trends, these sums are more likely to be spend on foreign homes than in the British economy."

The point of this, is why cut IHT when we can cut taxes which are more likely to benefit the British economy?

-----

The Conservative Party is a party of individual freedom, and I can see why many people are therefore suspicious of a tax on a person's right to bequeath their wealth. However, I simply take the view that there is a plethora of other pernicious taxes, which are far more damaging to the principle of individual freedom.

In addition, this tax creates incentives, which make a valuable contribution to a socially mobile society. IHT is fundamentally more liberal, because unlike income tax, stealth taxes and to an extent capital gains tax, it is creates incentives, rather than directly taxing normal economic activity.

[liz Spencer]

Inheritance tax should be abolished. It is, in principle, wrong. It is a tax on net earnings and equates to double taxation. This is a tax on money earned, and taxed, and the taxed again on one's death. It hurts to whomever you leave you estate, be that a charity, friends or your children and relations. It impedes both wealth creation and social responsibity.