Clear majority want to keep inheritance tax at current level or raise it – new TUC polling finds
- Just 2 in 10 support a cut to the £1 million inheritance tax threshold – 6 in 10 think it should remain the same or increase, including 6 in 10 Conservative voters
- Only 4% of estates pay any tax at all on their inheritance, but 32% of those who expect to benefit from inheritance think they will have to pay tax on it
- TUC warns with public services under huge pressure, an unfunded tax giveaway to the wealthiest would be “reckless in the extreme”
- “The Conservatives have broken Britain, and they seem hellbent on making things even worse” – TUC
A clear majority (60%) of the public are against cuts to the £1 million inheritance tax threshold – while just 2 in 10 said they wanted the tax lowered, according to new polling published by the TUC today (Thursday).
The polling, commissioned by the TUC and conducted by Opinium, reveals:
- Just 2 in 10 (20%) think that those who inherit over the £1 million inheritance tax threshold should pay less – 60% think inheritance tax should remain the same or be higher, including 62% of Conservative voters from the 2019 general election.
- Only 2 in 10 (20%) think the threshold for paying inheritance tax should be higher than the current £1 million for married couples – most (60%) think it should remain the same or be lowered, including 61% of Conservative 2019 voters.
The polling comes as media reports suggest the Conservatives are considering plans to reduce the rate of inheritance tax, with a view to abolishing it altogether in the longer-term.
Currently, most married couples can leave up to £1 million to their children tax-free. Inheritance tax is only paid at 40% on assets and wealth above £1 million – and even then loopholes can mean that for some families no tax is paid on assets worth over £1 million.
The IFS has estimated that the wealthiest 1% would get half the benefit of scrapping inheritance tax, with an average tax cut of £1 million.
Very wealthy minority
The TUC says cutting inheritance tax for millionaires would represent “a handout to the wealthiest”.
Most people either do not receive any inheritance, or pay no tax on anything they inherit – with just 4% of estates paying any inheritance tax at all. The TUC says abolishing inheritance tax would be a giveaway for “a very small, very wealthy minority”.
Last year, for 396,000 deaths HMRC was not even notified. In many of these cases there will have been no significant inheritance at all – let alone any inheritance tax paid.
The TUC says many more expect to pay inheritance tax than do in reality.
The polling reveals that a sizable 32% of the public who expect to benefit from inheritance think they will have to pay inheritance tax – significantly higher than the 4% of estates that do.
“Reckless in the extreme”
The TUC says lowering inheritance tax would be “reckless in the extreme” and “an act of levelling down” by the Conservatives.
Inheritance tax is set to contribute a hefty £7bn annually to the public purse, according to the latest OBR forecasts.
And IFS analysis suggests that tax revenue from inheritance tax will increase from around £7 billion in the current year to around £15 billion in a decade’s time.
With “public services on their knees and school buildings crumbling”, the union body says an unfunded cut to inheritance tax would be the last thing the country needs.
The TUC is renewing its call for a “national conversation on fairer tax” to help build a fairer society and “fix broken Britain”.
The TUC says these new polling findings show that there is no substantial public support for allowing people to pass on millions of pounds tax free.
Recent polling showed the majority of the public think that the wealthy should pay more tax – and supported increased capital gains tax, and windfall taxes on the excess profits of energy companies, banks and online retail giants.
Runaway inequality
The TUC warns that “runaway inequality” has “become the norm” in Tory Britain. The union body adds that a tax giveaway for the wealthiest would “only make matters worse”.
The ONS’ analysis of its Wealth and Assets Survey shows that the richest 1% of households had wealth of more than £3.6 million, and the least wealthy ten per cent had £15,400 or less.
Of financial wealth, the ONS say the wealth held by the richest 1% of households was greater than for the entire bottom 80% of the population.
The TUC says at the same time, working people have been left brutally exposed to the cost of living crisis after the longest wage squeeze in 200 years.
TUC General Secretary Paul Nowak said:
“Nothing works in this country anymore. But instead of getting on with fixing our public services, the Conservatives are considering a tax giveaway to millionaires.
“Abolishing inheritance tax would be a huge tax cut for a very small, very wealthy minority – and drain £7bn from the public purse each year.
“Slashing it would be reckless in the extreme and an act of levelling down.
“It’s no surprise that a clear majority of the public oppose lower inheritance tax thresholds and instead want the wealthiest to pay their fair share.
“At a time when our NHS is on its knees, school buildings are crumbling and runaway inequality is blighting every corner of the country, the last thing we need is an unfunded tax cut for the wealthiest.
“The Conservatives have broken Britain, and they seem hellbent on making things even worse.
“It’s time for a reset. We need an economy that rewards work – not wealth.”
