Grant Shapps: Inheritance tax is 'punitive and unfair'

Grant Shapps, pictured on Sunday, said that for many people the issue of inheritance tax was a matter of «aspiration»; Photo: Holly Adams/Reuters

Inheritance tax is “punitive and unfair”, a Cabinet minister has said, amid reports Prime Minister Rishi Sunak is considering cutting the tax.

The tax is levied at rate of 40 per cent and is payable on estates worth more than £1 million per couple.

Mr Shapps, the defense secretary, told Sky News on Sunday that inheritance tax is an issue for many people. «aspirations».

One official called it «the most hated tax in Britain».

However, both Downing Street and the Treasury have cautioned against expecting such an announcement anytime soon.

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They noted that Chancellor Jeremy Hunt had said as recently as last week that the November autumn statement there is no room for tax cuts.

Defense Secretary @grantshapps says inheritance tax is «punitive and unfair» but adds that «we are in a financial straitjacket» and that just last week the Chancellor said he «sees no room for tax cuts».#TrevorPhillipshttps ://t. co/fhIHlpTGAF

📺 Sky 501/YouTube pic.twitter.com/OBAkV04UuV

— Sky News (@SkyNews) September 24, 2023

One of the ideas is a two-stage tax abolition with its reduction in the March Budget — before the Tories go to the polls with plans to scrap it entirely.

A government source said: “This issue is not being considered at this time.”

However, Mr Shapps said: «People know there is something deeply unfair about taxing their entire lives and then taxing them for their deaths.»

He added that, As someone who recently lost a parent (his father, 91, died earlier this month), he understands why people might consider the estate tax «particularly punitive.»

«It's true that every tax is under consideration. I think the inheritance tax is particularly punitive and unfair,” Mr Shapps said.

“But we also recognize that we are in a financial straitjacket and the chancellor only last week said he saw no room for tax cuts.”

Inheritance tax is levied at 40 per cent on properties valued at more than £325 £000, with an additional allowance of £175,000 for the main residence if it is passed on to children or grandchildren.

Spouses can split their benefits. this means most parents can pass £1 million to their children without paying any tax.

'It's too early to talk about tax cuts'

One government source told The Sunday Times: 'Not a dozen political councilors do not see the abolition of inheritance tax as something that could be included in the manifesto. We can’t afford it yet.”

But another said on Sunday: “The financial situation is very difficult, as Jeremy keeps saying. I think it's too early to speculate on tax cuts.»

In addition, Downing Street looks set to fight the next election by promising to maintain the pensions 'triple lock'.

Mr Sunak has decided to stick with the policy despite experts saying it could add up to £45 billion a year to welfare costs by 2050.

But despite the costs, private polling showed voter reaction to the idea of ​​repealing the policy was so negative that Conservative strategists have ruled out any change.

The lockdown will ensure pensions rise with inflation. , earnings or 2.5 per cent — whichever is higher.

One source told The Mail on Sunday: 'Rising wages and inflation have made the measure very costly, but the political cost of reversing it would be huge » higher. Suicide.”

Plans to tackle funding for social care for older people have also been scrapped amid fears of a repeat of the “dementia tax” fiasco that derailed Theresa May’s 2017 election campaign.

< p >A government spokesman said: “We are committed to the triple lock.”

“As usual, the Secretary of State [for Work and Pensions Mel Stride] will conduct her statutory annual review of benefits and state pensions in the autumn, using the latest available data and we will not pre-empt it.”

He added: “We do not comment on speculation around future manifesto commitments.”