Simplify inheritance tax, say MPs

The all-party parliamentary group on inheritance tax and intergenerational fairness is calling for inheritance tax to be cut from 40% to 10% and 20% for estates worth more than £2m.

The MPs suggest replacing the current inheritance tax regime which combines a high flat rate of 40% with an array of associated reliefs with a flat rate gift tax payable on lifetime and death transfers. The key principle is that the rate should be low enough for the tax to be broadly based without the need for complex reliefs. The aim is that this would lead to less avoidance and ensure the UK’s competitiveness in attracting wealthy people to come in the UK say the MPs. Aligned to this change all reliefs other than spouse and charity exemptions would be abolished as would the tax-free capital gains tax uplift on death. There would be a death allowance at...