UK’s wealthiest receiving millions in inheritance tax relief
The UK’s wealthiest families are receiving up to £666 million a year in inheritance tax relief on land and business property from the government, recent research has shown.
Politicians are giving some of the wealthiest families in the UK generous tax breaks, money that cuts into the cash that could be spent on doctors or teachers, said the Tax Justice Network based on data acquired from HMRC.
The Tax Justice Network's (TJ) research found that 261 families with agricultural property worth more than £1 million shared £208 million in tax relief in 2015-16 while 234 families with business assets worth over £1 million shared £458 million. Similar amounts of tax relief were claimed in each of the years TJ analysed between 2013-14 and 2015-16.
Moreover, TJ revealed that 62 families with agricultural property worth more than £2.5 million shared an approximate tax saving of £107 million, which works out as an average saving of £1.7 million per estate.
At the very top, just 51 families with business property worth over £5 million shared an approximate tax saving of £327 million, which works out as an average saving of £6.4 million per estate.
"Inheritance tax is unpopular, but most people don’t own enough to pay it since every couple can pass on up to £950,000 of their wealth tax free. Our research shows that if you're very well off there are additional ways of cutting your bill," TJ said.
However, the research also points to abuse in the system. Namely, farmland has become an increasingly popular financial investment.
In 2017, just 40 per cent of agricultural land was purchased by farmers, down from over 60 per cent in 2011, while investors have flocked to buy agricultural land and property.
In order to regulate the area, TJ suggests the government should cap the amount of relief that can be given out. It, however, cautioned that any reform should be part of a broader look at the subsidies and tax breaks that landowners get.