Only 2% of estates in Wales would be affected if the UK Chancellor cuts inheritance tax at Wednesday’s Autumn Statement – according to new Wales TUC analysis published today (Monday).
The analysis of official statistics shows that of the 38,575 people who died in Wales in 2020/21 (the latest year for which figures were available) just 790 estates had to pay any inheritance tax at all.
The analysis shows that people in London and the South East would be – by far – the largest beneficiaries from cutting inheritance tax.
Estates in London and the South East are three times more likely to pay inheritance tax than Wales.
But even in the capital (93%) and the South East (94%) nearly all estates don’t pay any inheritance tax.
Currently, most married couples can leave up to £1 million to their children tax-free.
Inheritance tax is only paid at 40% on assets and wealth above £1 million – and even then loopholes can mean that for some families no tax is paid on assets worth over £1 million.
The IFS has estimated that the wealthiest 1% would get half the benefit of scrapping inheritance tax, with an average tax cut of £1 million.
The Wales TUC says cutting inheritance tax for millionaires would represent “a huge handout to the wealthiest” and starve public services of vital funds.
Most people in the UK either do not receive any inheritance, or pay no tax on anything they inherit – with just 4% of all estates paying any inheritance tax at all. The Wales TUC says abolishing inheritance tax would be a giveaway for “a very small, very wealthy minority”.
Wales TUC polling from earlier this year shows that a clear majority (60%) of the public are against cuts to the £1 million inheritance tax threshold – while just two in 10 say they want the tax lowered.
The poll, commissioned by the TUC and conducted by Opinium, revealed:
The Wales TUC says lowering inheritance tax would be “an act of levelling down” by the Conservatives.
Inheritance tax is set to contribute a hefty £7bn annually to the public purse, according to the latest OBR forecasts.
And IFS analysis suggests that tax revenue from inheritance tax will increase from around £7 billion in the current year to around £15 billion in a decade’s time.
Wales TUC General Secretary Shavanah Taj said:
“This week’s Autumn Statement is about political choices.
“At a time when people are struggling with the cost of living it would be obscene to give a huge tax cut to a very small, very wealthy minority.
“Virtually no-one is affected by inheritance tax in Wales, but if it is cut our public services will be starved of much-needed funding yet again.
“Slashing it would be an act of levelling down.
“The Conservatives have broken Britain, and they seem hellbent on making things even worse.
“It's time for a reset. We need an economy that rewards work – not wealth.”
Region |
number of estates resulting in a tax charge |
Deaths |
percentage of deaths that resulted in an IHT charge |
Amount paid in IHT in the region as % of all IHT paid |
United Kingdom |
27000 |
721248 |
3.74 |
|
England |
22200 |
599173 |
4 |
|
North East |
467 |
33150 |
1 |
1% |
North West |
1700 |
86840 |
2 |
5% |
Yorkshire and the Humber |
1160 |
61671 |
2 |
4% |
East Midlands |
1210 |
54589 |
2 |
4% |
West Midlands |
1630 |
68286 |
2 |
5% |
East of England |
2880 |
68873 |
4 |
10% |
London |
4800 |
65214 |
7 |
23% |
South East |
5650 |
97603 |
6 |
22% |
South West |
2700 |
62947 |
4 |
9% |
Wales |
790 |
38575 |
2 |
2% |
Scotland |
1340 |
65350 |
2 |
4% |
Northern Ireland |
301 |
18150 |
2 |
1% |
Contacts:
TUC press office
jallen@tuc.org.uk
078 775 295 68