Inheritance tax reliefs: lessons from history

Benjamin Franklin famously said: ‘In this world nothing can be said to be certain except death and taxes.’ There are some taxes that are inextricably linked to death and this article will focus on one of those taxes inheritance tax.

Origins of inheritance tax

Inheritance tax has a complex history and can trace its origins to estate duty which became part of legislation in 1894. It was created to try and rationalise the ad hoc system of five separate death duties that had come into existence over a period of many years. The existing system was complex and unfit for purpose; the government’s intention was that this duty would tax capital values of land and property for the first time – hence the debates surrounding its introduction into legislation were protracted.

Over the years estate duty continued to evolve and it became clear that the different...