In my experience, some worry too much about Inheritance Tax, others not enough. Most married couples who own their own home have a £1m allowance and even with ‘soaring house prices’, a majority fall below the limit. The allowances, however, have been frozen, and many of the extras, the £3,000 you can give away each year and £250 for gifts to as many different people as you wish, haven’t changed for nearly 40 years. Indeed, the main allowances haven’t changed since 2009, and would be 40% higher had they kept pace with inflation (yes, that’s how much 14 years-worth is even at low rates!) The IHT rules are an extremely tangled web already, and of course those whom the original ‘Death Duties’ were established to hit, the landed gentry and super-rich, have always been pretty adept at avoiding most forms of tax. And so, yes, it’s the squeezed middle who suffer. As always. And who usually don’t notice and keep voting to suffer.
Yes, Inheritance Tax is in need of reform, but then so is most of our ridiculously complex tax system. We tend to assume that ‘Death Duties’ are a relatively new, socialist tax intended to stop the landed gentry passing on their stately homes and estates and perpetuating their advantages.