Former Conservative chancellor Norman Lamont has urged Rishi Sunak to disregard calls from his personal MPs to ditch inheritance tax.
The Tory grandee mentioned he doesn’t “purchase” the argument that the tax on inherited wealth is extensively hated – telling the PM to concentrate on chopping revenue tax as an alternative.
Mr Sunak and Jeremy Hunt are below strain to ship tax cuts by 6 March, with the PM and his chancellor mentioned to be contemplating strikes to scrap or lower inheritance tax.
Sir Iain Duncan Smith, Sir Jacob Rees-Mogg and different senior Tories have urged him to eliminate inheritance tax in a bid to spice up the occasion’s polling fortunes forward of the final election.
However Lord Lamont, chancellor below John Main between 1990 and 1993, mentioned chopping it solely advantages “a small variety of individuals”, including: “I don’t actually purchase the argument that it’s a lot hated by everybody.”
“The biggest variety of individuals ought to profit from no matter is feasible,” the Tory peer informed The Telegraph. “My precedence can be [raising] revenue tax thresholds. They have an effect on the most individuals.”
Lord Lamont added: “I feel you need to give some aid to individuals who have paid the worth and have needed to pay for among the measures that have been launched through the [Covid] pandemic. I feel the common particular person wish to see slightly mild on the finish of the tunnel.”
Regardless of calls from the Tory proper to scrap the “hated” inheritance tax, fewer than 4 per cent of estates within the UK pay the levy on inherited property, cash and shares.
The revered Institute for Fiscal Research says the wealthiest 1 per cent of individuals in Britain would obtain 47 per cent of the good thing about scrapping it. Inheritance tax is forecast to offer virtually £10bn a yr for the general public coffers by 2028-29.
A plan to abolish inheritance tax is being contemplated as a part of a “gear change” on tax, based on The Telegraph. However No 10 and Treasury sources have performed down experiences as hypothesis.
Some red-wall Tory MPs have additionally urged Mr Sunak to usher in tax cuts for individuals on decrease incomes – relatively than lower inheritance tax for the wealthiest – in March.
“We must always think about incomes and thresholds relatively than inheritance tax. That produces extra profit for a better variety of individuals,” John Stevenson MP, head of the Northern Analysis Group, informed the Each day Mail.
Former minister Neil O’Brien, Tory MP for Harborough, mentioned Mr Hunt ought to supply “tax cuts for these on the backside finish to assist with the price of dwelling, and tax cuts that enhance productiveness”.
Nonetheless, many senior Tories are nonetheless pushing for the PM and chancellor to behave on inheritance tax. Sir Jacob mentioned inheritance tax was “a pernicious and dangerous tax, which should be scrapped”.
Former chief Sir Iain mentioned: “I might scrap it altogether. The political influence can be monumental.”
In the meantime, Ranil Jayawardena, chair of Liz Truss’ Conservative Progress Group, mentioned: “Time is operating out and the federal government must be daring: it’s time to scrap inheritance tax.”