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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.
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.