Why abolishing Inheritance Tax would actually reduce wealth inequality

The article argues that abolishing Inheritance Tax could reduce wealth inequality by allowing families to pass on money that matters more to people with less existing wealth. It also says inheritances can provide start-up capital to people who may struggle to borrow, supporting business creation and growth.

It cites a 2021 OECD report finding that, across 12 countries, the second-poorest fifth benefited more from inheritances than the richest fifth relative to their wealth. UK data cited in the article suggests estates worth £2m to £7.5m face tax bills exceeding 25 per cent, while a survey found one in five business owners used an inheritance to start their firm. The article notes that unspent pension pots are due to be included in estates from April 2027, and the Office for Budget Responsibility forecasts that more than 10 per cent of estates will pay the tax in three years.