Inheritance tax "should be abolished"

Inheritance tax is no longer suited to Britain's needs and should be replaced with an updated version, it has been claimed.

A report by the Institute for Public Policy Research (ippr) argues "declining revenues and public hostility" mean the levy is not worth maintaining, a suggestion that could have implications for those making a will or planning for estate administration.

The body advises a Capital Receipts Tax on gifts valued above £150,000 would be more effective, saying a stratified system of higher charges for larger amounts should also be part of the plans.

Nick Pearce, ippr director, highlights the "historical importance" of inheritance tax, but maintains: "There is no political prospect of radically increasing its scope and revenue, so it is time to give up on it."

Lovemoney.com recently reported large cash gifts could be a way of mitigating death duties, with charity wills another possible option for those hoping to avoid government charges.

Published by Phil Hammond