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Scrapping inheritance tax would cost the government almost £15bn a year in lost revenue by 2032, according to analysis by the Institute for Fiscal Studies that follows calls from Tory MPs for the main tax on inherited wealth to be abolished.
Inheritance tax is charged at 40% on wealth over £325,000. Individuals then have an extra £175,000 allowance towards their main residence if it is passed to children or grandchildren, and spouses can share their allowances. This takes the allowance to £1m between a married couple, allowing them to distribute a seven-figure sum tax-free.
Inheritance tax is charged at 40% on wealth over £325,000. Individuals then have an extra £175,000 allowance towards their main residence if it is passed to children or grandchildren, and spouses can share their allowances. This takes the allowance to £1m between a married couple, allowing them to distribute a seven-figure sum tax-free.