Rishi Sunak has said there is always “plenty” of speculation about tax, amid suggestions that the Prime Minister is drawing up plans to slash death duties.
The Prime Minister insisted that he would not be commenting, after speculation that he is considering cutting inheritance tax.
Downing Street had sought to play down reports in The Sunday Times about potential reforms, with Mr Sunak on Monday instead choosing to stress Government efforts to halve inflation.
According to the newspaper, one proposal being considered is for Sunak to announce his intention to phase out the levy by reducing the 40 per cent inheritance tax rate in the budget in March, while setting out a pathway to abolish it completely in future years.
Cabinet minister Grant Shapps over the weekend called inheritance tax “punitive” and “deeply unfair”, but said that Chancellor Jeremy Hunt was in a “fiscal straitjacket”.
Inheritance tax is levied at 40 per cent, but the vast majority of estates fall below the threshold – which can be up to £1 million for a couple – to incur the charge.
The latest figures, for the tax year 2020 to 2021, showed just 3.73 per cent of UK deaths resulted in an inheritance tax (IHT) charge.
According to the Labour Party, Sunak could save himself a small fortune if the tax is scrapped.
By their calculations, the prime minister – who is believed to be one of the richest men to have ever taken the post – would be in line to save himself £300 million.
The social media post was accompanied by a caption that read: “They’re not on your side”.