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There would have to be transitional arrangements to make sure that the Treasury would not lose revenues in the early years but it substantially extends the tax base and would yield more with the passage of years.
Successful entrepreneurs often remove their domicile from Britain as they age and there has to be a reason why. The byzantine tax code with its many loopholes still does not appeal to them.
The City has had diminished business in many areas due to poor transport links during the Covid-19 emergency and could do with the onshoring of British and other fortunes as offshore centres come under new challenges.
Innovation, not marginal trade deals, should be the response to temporarily reduced physical trade with Europe post-Brexit and that will include fiscal. It is not about undercutting - you can already see corporate tax rates rising - it is about being different.
Death duties were a stuffy old tax favoured by post-war socialists to reduce the power of the landed aristocracy. The 'new aristocracy', if there is one (New Labour secretly wanted to be it in a Napoleonic way), is not particularly landed but plutocratic. Its choices have already been made to circumvent stuffy old taxes.
The reason the young voted for Margaret Thatcher in their droves in 1979 and 1983 was because they were not prepared to put up in their turn with Labour's high marginal rates of income tax and death duties that their parents and grandparents had had to put up with.
For older voters it was frustration with the chaos of the winter of discontent, union militancy, rampant inflation and then, later, the personality of Labour leaders.
As the 2010 election approached David Cameron was in trouble until the Conservatives promised to raise the inheritance tax limit to £1 million per person. There was an immediate 10 percentage point uplift in the Conservatives' vote share which never reversed and carried him across the line.
The promise was not kept in office, unlike Boris Johnson's of Brexit, and he secured a minimal majority in 2015.
In does not matter exactly what it is replaced with, or that we must consent to the Treasury raising a bit more, any PM that delivers an inheritance tax abolition this side of the next election will get at least another 10 point uplift and will be set fair for the rest of the decade.
REPLACEMENT OF INHERITANCE TAX
Reviewed by ANDRE BEAUMONT
Laws on inheritance taxation are superior to those in the United Kingdom in America except that the latter give a means of exemption through donations to what the British would call charities or foundations.
As for charities, we have no quibble at all with those whose purpose is for the alleviation of poverty, the suffering of animals and so on but educational establishments like Harvard create endowments in the billions, which is to these charities' detriment as alternative destinations for donations.
In Europe, the political donor Robert Maxwell established a foundation to channel money to those involved in setting up media businesses.
In Britain we should replace the most unpopular tax on the statute book, inheritance tax, with a lifetime gifts receipts tax with wider reach.
Billionnaires can readily avoid inheritance taxes but they do want to leave money both to individuals and non-natural persons.
To a fair extent they will only domicile their fortunes in the United Kingdom if the costs of doing so are less than the lifetime cumulative costs of setting up avoidance measures like trusts or foundations.
We would propose that in the United Kingdom a gifts receipt tax should be payable by all natural persons at 12% once lifetime allowances of £1.25 million have been used up. For inheritors of art works of national importance, historic houses and active farms a reduced rate of 6% would be payable.
A 6% rate would be paid by all educational and media charities, and by foundations with similar primary purposes, on gifts received of a value over £1000.
Trusts and companies would pay at a rate of 12% on all gifts received, with no allowances.
Gifts to natural and non-natural persons outside the jurisdiction would be subject to an immediate deduction of tax at 12% with no allowances before they left the jurisdiction.
These proposals would result in an uplift of Treasury revenues, reduce the incentives to establish tax avoiding trusts and encourage many large fortunes to come onshore following the removal of unrealistic marginal rates.
The figurative reality of Inheritance Tax
A socialist government used death duties to make the big displacement guys sell up
Seventy years later Inheritance Tax figuratively taxes the four two sail vessels at 40% (or a little less with allowances), and the left seeks to tax them more, so that at least two of the four 'families' have to sell up never to have their own boat again
The single sail vessels are too small for now but beware the Reeves Exchequer cutter if they add a sail
Anyone else has flagged it up right - it's not realistic like 12% is it? - and done a big displacement
(Vessels in photograph unrelated to U.K.)