Ahead of the election the UK Reform Party is promising to abolish grief and inheritance tax (IHT) for estates under £2M in their contract.
The working draft manifesto, which was released on Monday, is being called a ‘contract’ to the British public and the party’s leader Richard Trice has said: “Our country is worse off, both financially and culturally. The economy isn’t growing. It is being wrecked by record taxes, wasteful government spending and nanny state regulations.”
Alongside proposing a 50 per cent cut to foreign aid which Reform UK claims will save the country £6bn from a £12.8bn budget, the party also seeks to slash IHT and grief tax for all estates under £2m. Estates worth over £2m will have a 20 per cent tax imposed on them – which is significantly lower than the current levy of 40 per cent, which is liable to those looking to leave significant wealth to heirs.
The current threshold for inheritance tax is £325,000, although there are some exceptions for family homes. Reform UK are also proposing that estates worth of £2m will have the option to donate the 20 per cent tax to charity.
Multiple Tory campaigners have told The Telegraph that despite pressure from senior MPs their manifesto will not include an IHT cut. Three former Tory chairmen last week called for the “unfair” tax to be cut, with Sir David Davis suggesting that the threshold for estates paying it should be raised from £1 million to £5 million.
In the Chancellor’s budget earlier this year, several changes to IHT were announced, including easing payment of IHT before probate or confirmation. This means that starting from April of this year personal representatives of estates will no longer be required to seek commercial loans to pay IHT before probate. The budget also put in measures for UK non-doms with reforms to move to a residence based regime for IHT to come into effect in April 2025.
