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Inheritance tax, currently paid at a rate of 40%, is charged on the part of a deceased person’s estate above a threshold of \u00a3325,000.<\/p>\n
But it only applies fewer than one in 20 estates. <\/p>\n
No tax is paid if the estate is valued at less than \u00a3325,000, or if anything above this threshold is left to a husband or wife, civil partner, charity, or a community amateur sports club.<\/p>\n
And if a home is part of the estate and a person’s children and grandchildren stand to inherit it, the threshold can go up to \u00a3500,000.<\/p>\n
Ms Reeves could raise the rate of inheritance tax, or curb the relief available on certain inherited assets. <\/p>\n
These include agricultural land and pension savings, which can both be inherited tax free. <\/p>\n
There are also allowances for unquoted shares, which are shares in a business not listed on the stock exchange.<\/p>\n
James Smith of the Resolution Foundation believes inheritance tax should be reformed because there are “all sorts of reliefs within the system that allow you to move your assets in a way that allows you to avoid paying inheritance tax”.<\/p>\n
However, Mr Johnson says Ms Reeves will have to go further than simply curbing allowances, saying: “You won’t raise a lot by doing that – maybe a billion or two.”<\/p>\n
Calls to cut or abolish inheritance tax come often as the tax is so unpopular, the Resolution Foundation says.<\/p>\n<\/div>\n<\/div>\n
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