FACTS ABOUT INHERITANCE TAX AND WHY SCRAPPING IT IS A GOOD IDEA - 18 out of 38 OECD countries do not levy any inheritance tax on direct descendants. - The UK has the fifth highest inheritance tax in the OECD. - The effective UK IHT rate is three times the global average and two times the EU average. - The US levies IHT but it only cuts in if your estate is worth over $12.92 million. A married couple doesn't pay the death tax unless their assets exceed $26 million... - The inheritance tax threshold has been stuck at £325,000 for 17 years since April 2009. - Inheritance reduces inequality. OECD 2021 report pointed out: "While lower-wealth households receive smaller inheritances and gifts, these are typically large as a share of net wealth." - The claim that only 4% of estates are liable is out of date. HMRC figures released in 2023 showed that within 10 years 1 in 8 people (12%) will have IHT due on either their own or their spouse's death, rising to 23% in London. That was before Labour brought pension pots, business and agricultural assets and AIM stocks into scope. - Administering IHT directly costs the taxpayer approximately £66 million per year. - For those countries which still levy IHT, the rate is often modest. 4% in Italy if the estate goes to children, 15% in Denmark, 10% in Iceland... - By 2027 average priced properties in 77% of local authority areas will be liable to inheritance tax. - Sweden's left-wing govt scrapped the inheritance tax in 2004, boosting economic growth. Capital flowed in with Ikea founder Ingvar Kampland moving back to Sweden and Finnish financier Björn Wahlroos moved in... - Abolition would raise GDP per capita by 1.4% by 2044. - Removing the tax on bequests leaves more wealth intact to be saved and invested, lifting the economy's total capital stock by 0.78%. - In 2022/23, IHT raised 0.89% of total tax revenues. - Austria, Portugal, Sweden and Norway have all abolished inheritance taxes in the last 20 years. - At least 83 countries do not levy inheritance tax at all, including Norway, Sweden, Canada, Australia, New Zealand, Mexico, Austria, Cyprus, Slovakia, Israel, China, India and Singapore. A further 20 or so exempt assets passed to direct descendants, so a majority of countries either do not levy IHT or do not levy it on assets passed to children. - Inheritance is a critical source of business funding. Research by Charles Stanley found 20% of new businesses rely on inherited money, only 1% less than bank funding, and 19% of start-ups are financed by parents. Only 8% are funded by venture capital. 15% of business owners use inheritance for further growth investment. - The obvious consequence of the policy is that profits are hoarded to pay the tax bill rather than ploughed into investment. CBI Economics found 55% of BPR-affected and 49% of APR-affected businesses have paused or cancelled planned investments, an average fall of 16%. More than 60% expect to cut investment by more than 20%. - Around half of family businesses and farms foresee lower headcount or have paused recruitment, with an average headcount cut of 9% per firm and a similar 9% fall in turnover. - Abolition would add 300,000 to the workforce. - CBI Economics estimate reduced activity will cost £14.8 billion in GVA over the five years to 2030, of which £6.5 billion is family businesses and the rest supply chain. They put the result for the Exchequer at a net fiscal loss of £1.9 billion over the period, likely an underestimate.