Inheritance tax burden ‘still too high’

Inheritance Tax has come under fire again with the Institute for Fiscal
Studies adding its voice to the growing opposition to the duty.

Institute director Robert Chote said the tax is clearly ‘redistributive’,
adding that ‘it is hitting well-off households rather than the really, really
well-off households,’ the Financial Times reported.

The tax is set to bring ?3.6bn in revenue in the current fiscal year.

The latest dissent follows hotly after Gordon Brown’s article in the
FT this week, slamming his former cabinet colleague Stephen Byers’ call
for the abolition of the 40% death duty on homes valued at over ?275 000.

Halifax has also come out saying that if IHT had risen with inflation, it
would now be ?430,000.

The chancellor has raised the IHT threshold to account for inflation, and
says he intends to further increase it to ?325,000 by 2009/2010.

But critics say the bar should be higher still, since the tax has changed
from being a tax on the wealthy, to a burden on the middle classes.

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