Minister takes aim at inheritance tax

Inheritance tax came under the spotlight at the Conservative Party conference earlier this month, with a government minister suggesting it should be abolished.

Andrew Griffith, Financial Secretary to The Treasury and City Minister, said that while it was not part of his specific policy area he would be happy to see the back of the tax.

Speaking at a Centre for Policy Studies (CPS) event at the conference, Mr Griffith said: “I have lots of my fantastic local association with me here and they will know because they asked me at my selection meeting 27 months ago which tax, if I had the choice, I would most like to see eliminated. History will record it was inheritance tax.”

Michael Spencer, a Conservative peer and City financier who backed Liz Truss’ leadership campaign, also spoke out against the tax.

“My view is inheritance tax is profoundly unpopular – better to call it death taxes,” he told the CPS event. “I would be terribly thrilled if the Government contemplated that again, not least in economic terms as it means you retain capital in your own country.”

Mr Griffith agreed that the current inheritance tax system led to the nation missing out on income, saying he knew “a lot of people who have made considerable amounts of money and regrettably very, very many of them move their tax domicile overseas. I think that is a sad loss to the UK.”

During the Conservative leadership contest Ms Truss said she wanted to review the inheritance system while also suggesting the current tax system placed an “unfair” burden on families.

One option for the prime minister could be to increase the nil-rate threshold, which has been frozen at £325,000 since 2009. Alternatively, she could look at reducing the 40 per cent of inheritance tax that is paid beyond that threshold.

HMRC meanwhile has been seeing increased returns from inheritance tax. Earlier this year the Revenue reported a 14 per cent increase in receipts from the tax between the 2020/21 and 2021/22 financial years. This took the annual total of inheritance tax received by the government to £6.1bn.