Inheritance tax must be reformed, says IFS

The proportion of deaths resulting in inheritance tax is set to grow to over 7% by 2032–33 with one in eight people (12%) expected to pay the tax by this date according to a recent report Reforming inheritance tax published by the Institute for Fiscal Studies (IFS). 

Currently inheritance tax revenues are comparatively small at £7bn – or 0.3% of gross domestic product – a year. However the IFS forecasts that by 2032–33 they will rise to just over £15bn in today’s prices. 

Inheritance tax is arguably the UK’s most disliked tax with a recent YouGov poll survey finding that only 20% of people deemed it ‘fair’ compared with almost 60% for National Insurance contributions. ‘There is near-universal agreement that inheritance tax in its current form needs reform ’ the institute added. 

The report identifies several problems with the current...