The head of one of the leading think tanks in the UK has stated that the government should consider overhauling inheritance tax and how the system works in the UK.
Director of the Institute for Fiscal Studies (IFS), Paul Johnson, stated that the current system of inheritance tax was deeply unpopular with the vast majority of the public and called for a review into how the system is carried out. He stated that the current system was “flawed” and “deeply unfair” and called for a formal review from the government.
The call comes after some suggested that the Prime Minister’s family had attempted to minimise payments of inheritance tax after he was given two payments from his mother after the death of his father.
Currently, inheritance tax is not paid on sums left from one spouse to another but is paid on an estate worth more than £325,000 before anything is distributed to family members.
It was suggested by the director of the IFS that a review of the system was needed because there had not been any changes in inheritance law for thirty years and that the overall process was seen as unfair by many. In an interview, Paul Johnson said: “One of the reasons inheritance tax seems unfair is precisely because only the really pretty wealthy can pass on significant sums during life that don’t attract inheritance tax.
“For most people their wealth is in their pension and their house. Most people can’t pass that on in their life. Only if you’ve got a few hundred thousand pounds sitting around in bank accounts can you pass it on. That is just not available to most people.”
If you require any advice on inheritance tax or if you need support regarding your estate in regards to a Will or trust, contact us today using our online contact form.
