New data today from HMRC shows that inheritance tax revenue is soaring to new heights thanks to the Tories’ threshold freeze, which continues to drag increasing numbers of estates into payment. Receipts have jumped to £2.8 billion, £200 million up from the year before…
Rumours abound in industry circles that Reeves is drawing up plans to eliminate “loopholes” in IHT which allow for productive investment, including a relief on shares held in the junior Alternative Investment Market which allows them to be passed on tax free as long as they’ve been held for at least two years. AIM has already been riddled with delistings – experts say scrapping the relief will cause “irrecoverable damage”…
Meanwhile the leftist Resolution Foundation is now lobbying Reeves to remove the £175,000 additional inheritance tax allowance for families with children, which it claims “costs” the Treasury £2 billion and is “complex and distortionary.” Dragging everyone into payment – no wonder consumers are dreading the budget…
Left-wing think tank the IPPR is today pushing for tax hikes on wealth to address “regional wealth inequality.” Because capital gains are realised in London and the South East apparently that means opportunity” is “not accessible across the UK”…
The chief recommendation of the IPPR to “regionally rebalance the UK” is a gargantuan tax hike:
“Taxing all income equally: In the long-term we propose a unified tax schedule for all income types, including capital gains and dividends, to align with income from work by the end of this parliament. In the short-term, we propose the equalisation of capital gains tax with income tax implemented at the first fiscal event of this parliament.”
The IPPR is dressing up old ideas to roll the pitch for Reeves’ October budget. This exact policy was proposed in a 2018 report from the think tank which was co-written by one Carys Roberts. Roberts, former IPPR executive director, is now ensconced in Downing Street’s policy unit, working alongside fellow ex-director Rachel Statham. The capitalism-sceptic think tank is said to be “doing the most serious and influential policy work around the Labour party.” That work can accelerate now its personnel are at the heart of policy making in government…
The same 2018 report called for the replacement of inheritance tax with a whole-life gift tax, which is effectively a gargantuan enlargement of confiscation of family inheritance. As Guido revealed plugged-in tax lawyers are in active preparation for its imposition….
Reeves yesterday stoutly refused to rule out changes to capital gains or inheritance tax. This “Iron Chancellor” hogwash ain’t gonna last…
Rachel Reeves has done a rare media appearance today on a visit to manufacturers in Glasgow before a CBI roundtable with Scottish businesses. She was asked three times whether she would rule out raising Capital Gains Tax or Inheritance Tax in the budget. Thrice came a non-denial…
The Treasury’s latest projection is that a CGT hike will lose billions in tax revenue per annum. At the current thresholds 1 in 8 people will pay IHT on their or their spouse’s death within 10 years. These tax hikes will hammer the middle class hard…
The Telegraph reports today that taxpayers are accelerating pension contributions and realising assets ahead of a Labour capital gains tax hike in the budget on October 30th. Flurrying rumours are that Labour is crystallising plans for their other preferred ‘wealth’ tax hike…
Guido hears that plugged-in tax lawyers are actively preparing for the long-feared implementation of a gift tax. Specific rumours are coming thick and fast through the grapevine that Labour will remove the seven year rule on inheritance tax in order to charge on all assets passed down to next of kin at any point in life, as opposed to during the seven years prior to death. A massive extension of the tax Brits judge to be the most unfair and one that actually worsens wealth inequality…
Even the tax-grabbing fanatics at the Treasury have to face the truth. A Freedom on Information Request has revealed that internal Treasury briefings are making quite the case for a low-tax economy. A document from January this year, delivered to Jeremy Hunt, makes the statistical case. It’s a shame none of its lessons made their way into the budget…
While the Treasury claims that “there have been many important factors affecting advanced economy growth rates“, it is forced to admit in its analysis that “over the 2010-22 period, OECD economies with higher total tax (as a share of GDP) have on average seen lower cumulative GDP growth.” A phenomenon that has been observed for hundreds of years…
“This association applies whether looking at (1) all OECD economies; (2) removing some extreme outliers (Ireland, Turkey, and Greece); (3) removing all OECD economies that are not considered “advanced” by the IMF; and removing Ireland and Luxembourg given their unusual tax policies (presented in the below chart and table) and (4) considering just the G7 and Spain.“
The briefing established what people have been saying for years – that top performers have lower tax burdens: “The US and Canada saw the fastest GDP growth over in the G7 between 2010 and 2022, with the 1st and 3rd lowest tax burdens in the G7.” Any chancellor who wants to deliver a ‘Budget for Long Term Growth’ might take note…
Read the full Treasury briefing below:
Fresh polling in the post-Budget fallout will make grim reading for Tories. Labour’s lead has widened again to 28 points…
In an election year the Conservative vote has dipped below 20%. Tory high command insists they have delivered a “continuation” budget that hammers home their fiscal prudence. If they are looking to continue record low voter approval they are certainly succeeding…
