Sunak to make £90 billion from wealth duties, a ‘horror for families,’ according to inheritance tax.
THE INHERITANCE TAX might bring in tens of billions for Chancellor Rishi Sunak as the epidemic fuels discussion about tax revisions.
The ordinary inheritance tax rate is 40%, and it is only applied to the portion of your estate that exceeds the £325,000 level. However, the Chancellor of the Exchequer may be looking into ways to amend this as he seeks to raise additional funding in the wake of the pandemic’s economic downturn. Currently, the vast majority of estates do not pay inheritance tax, and more than 94 percent of estates are expected to pay no inheritance tax in the next five years.
However, the Mail claimed earlier this year that Mr Sunak and the Treasury will collect £90 billion in various wealth taxes over the next five years.
Mr Sunak was utilizing stealth taxes to enhance the amount the Government earned from tariffs, according to a March Budget document.
The inheritance tax threshold, as well as the pension lifetime allowance and capital gains tax thresholds, have been frozen until 2026.
“Instead of increasing the tax burden on businesses and individuals, the Chancellor should go for growth and take dramatic steps to simplify our tax structure – putting more money in the hands of individuals, families, and businesses,” said Sam Collins, policy adviser at the Institute of Economic Affairs.
According to the Office for Budget Responsibility (OBR), capital gains and inheritance tax brought in £14.9 billion to the Treasury in 2019-20.
However, by 2026, it will have generated £21 billion, a 41% increase.
“Wealth taxes cause economic distortion, affecting both enterprises and individuals,” Mr Collins continued.
“While the Chancellor claims that investment is critical to our economic recovery, capital gains tax has the opposite impact. It discourages investment, hinders entrepreneurship, and encourages tax dodging at high levels.
“There’s a reason why inheritance tax is known as Britain’s most despised tax. It is not only unethical as a sort of double taxation, but it is also a nightmare for families in terms of bureaucracy.”
While some experts are opposed to higher wealth taxes, others believe that they could be the key to rebalancing the economy.
Jack Leslie, the Chief Economist at the Resolution Foundation, told This website earlier this year that the government should modify wealth taxes to obtain revenue.
“The government should fix the system,” he stated, according to Brinkwire Summary News.