Tories at war over call to scrap 'morally wrong' inheritance tax

Tories at war over call to scrap ‘morally wrong’ inheritance tax: More than 50 MPs tell Rishi Sunak and Jeremy Hunt they want it gone to help families but critics say the party should lower income tax for working people first

• Nadhim Zahawi said it was ‘morally wrong’ to take a person’s wealth after death
• Former Tory ministers Priti Patel and Jacob Rees-Mogg also criticised the tax

The Conservative Party is engulfed in a major row over inheritance tax today after more than 50 MPs demanded it be axed ahead of the next election.

The Conservative Growth Group, formed by allies of former prime minister Liz Truss, wants Rishi Sunak and Chancellor Jeremy Hunt to act in the autumn Budget.

The 55-strong group, includes a former Chancellor, Mr Zahawi, who suggested it was ‘morally wrong’ to take someone’s assets on their death.

However they were facing pushback today from other Tories who say that giving a handout to mainly richer, older homeowners should be less of a priority than a cut in income tax for working people.

Writing in the Telegraph, the multi-millionaire – who was sacked from the Cabinet in January over his tax affairs – added it was a ‘spectre’ that haunts peoples ‘alongside death’ and created ‘inefficient distortions’ in personal finance.

However a Treasury source questioned how much getting rid of the tax would solve,  as it is paid by just 7 per cent of family estates anyway.

And the Next Gen Tories group, which represents younger Conservatives, said: ‘Taxes are high but we must consider how cuts should be prioritised. More estates are in the inheritance tax bracket because of inflated house prices.’

More than 50 Tory MPs including former Chancellor Nadhim Zahawi have urged Rishi Sunak and Jeremy Hunt (pictured) to scrap inheritance tax

Writing in the Telegraph, Mr Zahawi suggested scrapping the tax and said it was ‘morally wrong’ to take someone’s assets on their death

The Conservative Growth Group will publish a paper on the issue in June to convince the Treasury to abolish inheritance tax in the next budget.

Former cabinet ministers Priti Patel and Jacob Rees-Mogg also criticised the tax as ‘unfair’.

Mr Zahawi said: ‘As well as being morally wrong to take someone’s assets on their death, it also creates all sorts of inefficient and damaging distortions in our personal finances, and the wider economy.

‘The Prime Minister and the Chancellor are doing admirable work to help people through a global inflationary spike and war on our continent. 

‘By abolishing inheritance tax, they can show that they back families in their desire to pass on their hard-earned savings to the next generation.’ 

Mr Rees-Mogg also called for the tax to be scrapped, saying: ‘Death duties are an inefficient form of taxation that is unfair and economically damaging. 

‘Unfair because it is a double tax on already taxed assets. Economically damaging because it leads to the misallocation of capital, as investments are made to avoid a distortive tax rather than to maximise investment return.’ 

Former Home Secretary Miss Patel added: ‘People should be in control of their income and have the ability to determine the future of the assets they have worked hard to save and build up during their lifetime.

‘Substantial long-term reform is required and I would encourage proactive steps to support hard-pressed families across our country.’

Mr Rees-Mogg (pictured) also called for the tax to be scrapped and said it was ‘economically damaging’

Co-chairman of the Conservative Growth Group and former Cabinet minister Ranil Jayawardena said: We need to be bold and abolish inheritance tax altogether – no ifs, no buts. It’s a death tax. 

‘It’s also a double tax, because it’s a tax on money that has already been taxed. It’s not fair, it’s not Conservative and it’s not very British. It needs to go.’ 

A Treasury spokesman said: ‘More than 93 per cent of estates aren’t expected to pay any inheritance tax in the coming years – however the tax still raises more than £7billion a year to help fund public services like the NHS and schools. 

‘Estates of surviving spouses and civil partners can pass on up to £1 million without an inheritance tax liability – significantly more than the average UK home of £285,000.’ 

Source: Read Full Article