According to the Labour party, if Rishi Sunak proceeds with his proposed changes to inheritance tax, he could save himself £300m. The question is, does this refer to what he will inherit from his in-laws, or is it the amount he will save after his demise? Furthermore, let’s not forget that tax laws can be altered, and it’s unlikely that any of Sunak’s policies will still be in effect when those he knows are no longer with us. While this line of attack appears mild, it relies on two simple facts: only 4% of the population pays inheritance tax, and Sunak is exceptionally wealthy. It suggests that he is not on the side of the majority.
This seemingly innocuous statement is actually quite foolish. Since the passing of the 6th Duke of Westminster in 2016, it has become common knowledge that the super-rich can avoid paying inheritance tax. Hugh Grosvenor’s £9bn inheritance, for example, largely remains intact due to the use of complicated arrangements that are anything but transparent. In order to believe that Sunak’s family paid millions in inheritance tax, we would have to think that they are either unaware of the loopholes or choose not to utilize them like their fellow high-net-worth counterparts. While it’s not appropriate to speculate on the non-dom status of Sunak’s wife, Akshata Murty, it’s worth noting that this tax has long been optional for the extremely wealthy and serves as a targeted and financially puzzling levy for the 4% who fall just short of being ultra-rich.
Our discussion about inheritance tax epitomizes everything that is wrong with British political discourse. In reality, the tax had already been phased out to a large extent in 2015 with the introduction of the “resident’s nil-rate band” for married couples passing their main home to direct descendants. Since 2020, the first million pounds distributed in this manner is exempt from the tax. So, apart from sentimental items, the majority of an inheritance consists of low-value assets. It’s as if we’re watching dogs being fooled by someone hiding a ball up their sleeve, except this situation is far from entertaining.
Rather than emotional responses to eliminate a tax they won’t have to pay, we should examine why people advocate for the removal of a tax that benefits segments of society they will likely never belong to. Is it driven by aspirations or ignorance? However, a more thought-provoking question is why we are still fixated on this topic. Perhaps we should discuss other historical taxes, such as the window tax, which disrupted the lighting in my non-existent 18th-century mansion.
Instead of engaging in this debate on the prime minister’s terms, let’s approach it boldly by proposing a 100% inheritance tax. No windfalls for anyone; a complete redistribution of wealth through death. Sure, there may be legitimate questions like, “What’s the point if I can’t secure the futures of my 58-year-old heirs?” However, at least the discussion would be more interesting and different.
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Zoe Williams is a Guardian columnist
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