In anticipation of the upcoming election we have looked over each political party’s manifesto and other promises. The aim of this article is to look at what changes each of the main parties, if elected, could make to Inheritance Tax and other areas effecting estate planning and those working in the industry.
This article is purely informative on each party’s promises and is not intended to be a reflection of any political preferences of WillPack or any of its employees or partners.
The Conservative manifesto does not contain any proposed changes to Inheritance Tax. The chancellor Sajid Javid has previously suggested at a fringe meeting at the Conservative Party conference that he was considering abolishing Inheritance Tax.
The previous chancellor Phillip Hammond did request that the Office for Tax Simplification carry out a review of the Inheritance Tax regime. This led to the publishing of two different reports. One report on administrative concerns in November 2018 and a second on wider areas of technical concern in July 2019.
Labour have promised to “reverse George Osborne’s Inheritance Tax cut”, known to us will writers as the Residence Nil Rate Band. Not much is written about this plan, but it is likely to mean a return to the pre-2017 position of having the Nil Rate Band only.
The shadow chancellor John McDonnell had previously suggested in an interview on Sky News that the Labour party had been consulting on replacing Inheritance Tax with a different system taxing lifetime gifts.
The Labour party’s manifesto also includes a promise to increase the rate of Capital Gains Tax to the same levels as income tax.
The Liberal Democrat’s manifesto does not contain any changes to Inheritance Tax but does include an abolition of the Capital Gains Tax-free allowance and instead taxing Capital Gains Tax and salaries through a single allowance.
The Brexit Party have not released a manifesto and have instead published a Contract with the People. Amongst this is a pledge to abolish Inheritance Tax, citing that “It is ‘double taxation’ on a lifetime’s assets, levied at a time of family distress”.
The chairman of the Brexit Party Tim Rice has previously promised in an article for the Daily Express that the Brexit Party would abolish Inheritance Tax entirely.
The Green Party wish to merge employees National Insurance, Capital Gains Tax, Inheritance Tax, Dividend Tax and Income Tax into a single Consolidated Income Tax, meaning that all income would be treated the same way for tax purposes.
They will also introduce a Land Value Tax that will absorb the responsibilities of Council Tax, Business Rates, National Non-domestic Rates, Stamp Duty on Land, Annual Tax on Enveloped Dwellings, Capital Gains Tax on land sales, Inheritance Tax on land and Income Tax on land for owner-occupiers. The Land Value Tax will charge the landowner a proportion of the capital value of the land each year.
As the election progresses, we will keep you up to date with any further policy announcements.