Inheritance tax reform is long overdue

Few topics are as contentious as taxation with inheritance tax (IHT) arguably being the most disputed tax of all. For many commentators the UK’s IHT system is unfair out of date and over complicated. Changes over recent years have mostly been confined to process – such as reporting requirements digitalisation and administration – rather than substance.

The net result is that among large developed economies the UK takes the highest proportion of inheritance taxes. Given the Bank of England’s warning that Britain now faces its highest tax burden in 70 years IHT is one of the key areas where reform is long overdue.

Inheritance taxes in the UK have a long and complex history. When the then-chancellor Nigel Lawson first introduced IHT in 1986 he remodelled capital transfer tax which had been created by the Labour government in 1975 to replace estate...