Tory MPs split over timing of reported plans to slash inheritance tax
Conservative MPs are split over the timing of reported plans to slash inheritance tax rates, with some warning the move risks fuelling perceptions of intergenerational unfairness.
Rishi Sunak is reportedly preparing to announce a cut to inheritance tax, before abolishing it entirely, according to the Sunday Times.
It comes as Sunak is said to be readying a series of announcements intended to reframe his premiership, after rolling back net zero pledges, such as the 2030 petrol and diesel car ban.
The Prime Minister wants to present the tax offer to voters as an “aspirational” boon ahead of the next general election and prior to the Conservative Party conference next week.
But Conservative MPs had a mixed reaction to the news, despite polling revealing the public at large and Tory voters broadly seeing it as unfair or very unfair.
One Conservative MP told CityAM the move was “not a good idea”.
They added: “We’re unfairly seen as being a party for the rich and this feeds that with fewer than four per cent of people having to pay IHT.
“It’s an iniquitous tax and should be scrapped but there are other areas that are more acceptable at this time.”
While former levelling up and Treasury minister Simon Clarke tweeted: “If we are choosing our priorities for tax cuts, income tax should surely trump inheritance tax every time.
“3.8 per cent of UK estates pay IHT. The great majority of those in work pay income tax.”
He added: “I understand why IHT is inherently resented, but at a time when we face profound problems of intergenerational unfairness – especially on housing – we should focus our ability to ease the burden on rewarding the value of work.”
Some MPs did welcome the plan, with one senior Tory calling it “a very good idea” and a backbencher saying: “I very much hope the rumours are true. Inheritance tax is unpopular, cutting it will be the opposite.”
Under current rules, estates worth over £325,000 are subject to 40 per cent inheritance tax, with an extra £175,000 allowance on a main residence, if given to children or grandchildren.
Married couples can share allowances, so parents can leave £1m to their children tax free.
No10 has been approached for comment.