More people are in favour of abolishing Inheritance Tax (IHT) in 2025 than 12 months ago according to a YouGov poll commissioned by law firm Kingsley Napley.
The results of a survey of over 2,200 people found 54% of respondents were in favour of complete abolition, up from 49% a year ago. Opposition to what appears to be continued efforts by the government to tax later life assets is stronger than lats year according to the survey. 76% of respondents opposed an increase in the current 40% rate at which IHT is levied, up from 69% in September 2024. 67% favour raising the £325k threshold at which IHT must be paid, a small increase compared to 64% last year.
The Chancellor Rachel Reeves is facing calls to resits major tax changes at the upcoming budget as she attempts to plug a reported £20bn hole in the public finances. There has been widespread speculation in recent months she could target IHT on top of changes to agricultural property relief and business property relief, and the inclusion of pensions in IHT calculations. It has also been reported a gift cap and/or changes to the tapering rules on gift allowances could be introduced; as well as reports of her looking to remove the primary residence nil rate band exemption.
Despite this speculation the research found only a quarter of people have taken professional advice to reduce a potential inheritance tax liability. Three-quarters (76%) have either not considered or decided against doing so, despite the fact that ever more estates are falling within the net of inheritance tax said James Ward, Partner and Head of Private Client at Kingsley Napley.
“Inheritance tax is effectively this country’s wealth tax. It is only paid by 1 in 20 estates and whilst it is not a big money spinner for the Treasury in the scheme, it will no doubt be tempting for the Chancellor to squeeze more revenue out of these estates given her other pledges. Ms Reeves is unlikely to give two hoots about growing public opposition to IHT reform, despite the fact it is evenly spread in the voter community. The next election is also likely too far off for her to choose political over economic value in outflanking Farage.”
“We have had a busy summer of clients wanting to estate plan ahead of possible IHT related Budget measures,” James adds. “However interestingly, our research shows that only 5% of the general public have taken advice on mitigating any IHT that may be due on their estate. Many may therefore be missing an opportunity to protect their estates for loved ones left behind. Of course, the irony of any forthcoming Budget measures is that the property market slow down and increased caution of parents gifting to their offspring Bank of Mum & Dad style may mean any IHT changes become an own goal for the Treasury in any event.”
