Labour considering IHT overhaul to address wealth inequality, leaked recording reveals

Labour may target inheritance tax to tackle wealth inequality if they come to power, according to a leaked recording of Darren Jones, the shadow chief secretary to the Treasury, as reported by The Telegraph.

Speaking at a public meeting, Jones indicated a likely “political consensus” that inheritance tax should address inter-generational inequality. This follows an election campaign dominated by tax debates, with the Conservatives alleging Labour’s policies would cost households over £2,000 more annually.

Labour has avoided ruling out increases in inheritance, capital gains, or council taxes, while promising not to raise income tax, VAT, or National Insurance. Jones highlighted a surge in inherited wealth, particularly from rising housing values, as a reason to maintain and potentially expand inheritance tax.

Conservatives claim Jones’s comments confirm Labour’s intent to tax family homes, while Labour dismisses this as “total nonsense,” insisting their plans are fully costed without requiring new taxes.

Estates subject to inheritance tax are set to rise from 4% to 6% by the end of the next Parliament due to the frozen £325,000 threshold. Laura Trott, Chief Secretary to the Treasury, accused Labour of planning undisclosed tax hikes, particularly targeting family homes. In response, Labour emphasised their focus on economic growth and enhancing the well-being of working people, denying any plans for additional taxes.

Labour’s spokesperson criticised the Conservatives’ record, stating Labour’s clear and funded plans for economic improvement and fairness.

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