Majority of people want inheritance tax cut exclusive poll finds
A majority of people think that inheritance tax should be lowered, according to exclusive polling conducted for City PM.
Research from Freshwater Strategy showed that 54 per cent of voters think the controversial tax should be set at a lower level.
It is currently applied at a flat rate of 40 per cent on estates worth over £325,000. The Office for Budget Responsibility (OBR) estimates that inheritance tax will raise £7.5bn in 2024/25.
Just under a quarter (24 per cent) said it should be ‘a little lower’ while nearly a third (30 per cent) said it should be ‘a lot lower’. Only one in ten (nine per cent) said it should be higher.
Opponents of the levy, which is often dubbed the ‘death tax’, argue it is a form of double taxation and suggest that the 40 per cent rate acts as a disincentive to economic activity.
Others argue that the levy needs reform, pointing to the variety of loopholes in the system, which means that the effective rate is often much lower than the headline rate.
Research from the Centre for Analysis of Taxation showed that a quarter of estates worth over £10m paid an average rate of inheritance tax of nine per cent, while a sixth paid under four per cent.
Inheritance tax changes
The government announced a series of changes to inheritance tax in the Budget, including capping the relief available for agricultural land and bringing pension pots into the purview of inheritance tax.
Changes to inheritance tax were part of a wider £40bn increase in the tax burden, centred on the increase in employers’ national insurance.
Surveys since the Budget suggest that businesses increase prices and cut jobs to deal with the higher cost burden.
Economic growth has also slowed significantly since the summer, with the economy having contracted in both September and October.
Freshwater’s survey showed that three-quarters (75 per cent) of people were concerned about the impact of tax rises on the economy. Just under one in five (19 per cent) were not concerned.
Method note: Freshwater Strategy interviewed n=1,207 eligible voters in the UK, aged 18+ online, between 4-6 January 2025. Margin of Error +/- 2.8%. Data are weighted to be representative of UK voters.