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The Mail reported earlier this year that Mr. Sunak and the Treasury Department will collect £ 90 billion through various property taxes over the next five years. Figures from the Office for Budget Responsibility showed the Treasury Department made £ 14.9 billion from capital gains and inheritance taxes in 2019-20, but experts suggest that figure will increase by 40 percent after the pandemic.
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The current standard inheritance tax rate when inheriting property to non-direct descendants is 40 percent and is only charged on that portion of your property that is worth more than £ 325,000.
If your direct descendants (your children) inherit your estate, the tax rate will be more than halved.
For example, if you inherited an estate of £ 650,000 from a distant relative or friend, the second half of its value (325,000) will be taxed at a cost of £ 130,000. However, if you inherit £ 650,000 worth of property from your parents, you will be taxed at a much lower rate of £ 60,000.
However, if you inherit £ 650,000 worth of property from your parents, you will be taxed at a much lower rate of £ 60,000.
However, Mr Sunak might consider increasing this rate as he looks to raise more funds after the economic recession that accompanied the pandemic.
At the moment, the vast majority of estates do not pay inheritance tax as they are worth no more than £ 350,000.
In the next five years, more than 94 percent of the estates are expected to be exempt from inheritance tax.
If a change needs to be made, do you think it would be best for Mr Sunak to increase the inheritance tax percentage on properties over £ 325,000 worth of property that are already due? Or is it best to have a small inheritance tax rate on property below £ 325,000?
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Sam Collins, political advisor to the Think Tanks Institute of Economic Affairs, said, “The inheritance tax is known as the UK’s most hated tax for good reason.
“Not only is it immoral as a form of double taxation, but a bureaucratic nightmare for families.
“Instead of increasing the tax burden for companies and individuals, the Chancellor should focus on growth and take radical steps to simplify our tax laws – leaving more money in the hands of individuals, families and companies.
“The Chancellor argues that investment is the key to our economic recovery, but the capital gains tax has the opposite effect.
“At a high level, it discourages investment, discourages entrepreneurship and promotes tax avoidance.”
Do you agree with Mr. Collins? Would an inheritance tax hike discourage entrepreneurs and financiers from investing in the UK? Share your thoughts in the comment section.
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A March budget document stated that Mr. Sunak used covert taxes to increase the amount the government received from the levies.
A stealth tax is a tax that is largely passed unnoticed or not recognized as a tax.
They can take the form of trade taxes, sales taxes, property taxes, fees, surcharges, business licenses, and permit costs.
Resolution Foundation chief economist Jack Leslie told Express.co.uk earlier this year that the government should reform property taxes to raise funds rather than introduce a brand new inheritance tax system.
He said, “The government should fix the system it has, make it fairer and close the loopholes.
“You could raise billions without hitting the headlines.
“One of the really big trends in the economy over the past 30 years is that the total value of people’s wealth is about twice what it was 30 years ago.”
Should the richest be taxed more to reduce austerity in the UK, rather than ordinary people bearing the brunt of an increase in inheritance tax? Now choose.
