Inheritance tax may be on Rishi Sunak’s mind: ‘Need to find more money,’ he says.
As Chancellor Rishi Sunak seeks to raise finances, the inheritance tax could be targeted for revisions or perhaps a rise, according to an expert.
As the UK attempts to recover from the pandemic, rumours have alleged that Chancellor Rishi Sunak is considering raising inheritance tax. Mr Sunak is “moving towards” an increase in inheritance tax, according to insiders, as part of a slew of tax measures to help pay the near £400 billion Covid debt. According to Treasury officials who spoke to the I newspaper, the Chancellor is “inclined” to generate revenue by targeting people’s estates and fortunes.
“It is something the Chancellor is minded to do and is moving towards,” they said in May, “but the timing remains uncertain.”
Inheritance tax presently brings in £5.3 billion to the Treasury each year. According to tax and advice firm Blick Rothenberg, a 1% increase would bring in an extra £130 million each year, while a 5% increase would bring in an extra £650 million.
Steve Cameron, a pension specialist at Aegon, told This website that inheritance tax increases or reforms may be used to assist pay for social care in the UK.
“I don’t think wealth tax reform should be discounted,” he remarked. This issue, coupled with suggestions for social care funding, I believe, will resurface.
“I believe there is widespread agreement that we need a long-term approach to finance social care.
“Once the government makes its plans, it’s almost certain that additional money will be needed, and you’ll have to find it somewhere. One obvious way to do so is through taxation.
“Instead of charging a 20-year-old on their earnings to pay for social care for a 90-year-old who owns a home, inheritance tax may be a source of revenue.
“It would not be the most popular option; many people despise inheritance tax, but on the other hand, it is about fairness.
“It’s about finding a means to make money so that the elderly can have a dignified later life with the care they require.”
In January, the Resolution Foundation released a report revealing that official measures had missed about £800 billion in assets held by Britain’s wealthiest people.
With “Brinkwire Summary News,” the data also revealed a considerable growth in wealth inequality.