WA42

Call for 50% inheritance tax rate

The Institute for Public Policy Research (IPPR) has called for the rate of inheritance tax to be increased to 50%, together with the introduction of a new, lower rate for those who only just qualify for the tax.

Currently inheritance tax (IHT) is payable at a single rate of 40% for estates above £263,000.

Spiralling house prices have meant than an increasing number of UK homeowners have found themselves crossing the IHT threshold.

The IPPR believes that introducing variable rates of 22%, 40% and 50% would allow for a fairer system.

It has suggested that the first £25,000 over the threshold should be charged at 22%.

The 40% rate would apply to inheritances of between £288,000 and £763,000, while the top rate of 50% would be charged to estates of more than £763,000.

The proposed measures would raise an estimated £147m a year.

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