Scrap flat tax on inheritance and bring in a progressive graded system, says Jeremy Corbyn
The Government has cut the tax for people with million-pound estates
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Your support makes all the difference.Britain’s existing flat tax on inheritance should be scrapped and replaced with a “graded” progressive system, Jeremy Corbyn has said.
The Labour leader argued that bigger estates should pay a higher percentage of tax than people with small inheritances.
Currently all estates above the £650,000 eligibility threshold pay the same 40 per cent flat tax on inheritance.
The Chancellor announced that he was raising the threshold to £1m in his most recent budget.
But Mr Corbyn told the BBC’s Andrew Marr Show that such a change amounted to a tax cut for the country’s 60,000 richest households, who will benefit.
“The richest 60,000 families have suddenly had a tax break,” he said, ahead of his party’s conference.
“It should be graded actually. Somebody leaving a normal house to their children or family – fine.
“But when you cut the overall rate of inheritance tax that means that the very richest become richer because of it.”
Such a graded tax system could be similar to income tax, where a variety of rates of paid depending on how much someone earns.
Under the current income tax system there is a 20 per cent basic rate paid by most earners, a 40 per cent rate for people who have large salaries, and a 45 per cent rate paid by people with incomes that fall in roughly the top 1 per cent of earners.
Income tax by contrast kicks in at 40 per cent for all wealth above the current threshold.
The Conservatives’ pledge to raise the inheritance tax threshold was made in the party’s manifesto.
George Osborne introduced the policy in his Budget, arguing: “Inheritance tax was designed to be paid by the very rich, yet today there are more families pulled into the inheritance tax net than ever before - and the number is set to double over the next five years. It's not fair and we will act.”
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