To say that Inheritance Tax is all in the mind would be an exaggeration, but it is true to say that most who worry about it have no need to. Only 10% of estates (ie people who’ve died) actually pay it, and around 2% actually pay around half of the £7bn it currently rakes in. So while abolishing it might be a vote winner, in reality most of the benefits will go to the families of the wealthiest. And of course, it will be replaced by something else, probably a gift tax of some kind, whereby, as in many other countries, the recipients rather than the donors are taxed; which will probably turn out to be a much-bigger money-spinner for Messrs HMRC. Smoke and mirrors, and all that.
“Are Brits too reliant on inheritance for their retirement plans?”
The answer is, in many cases, probably yes, and as less and less of the next generations have or are able to build pensions and other saving, more and more so. And it’s a double-edged sword.
