According to the Labour party, if Rishi Sunak goes ahead with his planned changes to inheritance tax, he will save himself £300m. Does that refer to what he will inherit from his in-laws, or is it how much he will save after he’s dead? Are we forgetting that changes to tax law are hardly immutable and, thinking about it, it is unlikely that any of his silly talking-point policies will still be standing by the time anyone he knows has a change of mortality status? As lines of attack go, this is pretty mild: the simple statement of two facts – that only 4% of us pay inheritance tax, and that Sunak is extremely rich – followed by a proposition most of us will swallow pretty easily, namely that he is not on your side.
It shouldn’t be a stupid thing to say, and yet it is an extremely stupid thing to say. Because ever since the 6th Duke of Westminster died in August 2016, just at the dawn of our nation’s age of stupid, it has been common knowledge that if you are rich enough, you don’t pay any inheritance tax. The fact that Hugh Grosvenor’s estate is held in a trust means that the lion’s share of his £9bn inheritance is likely to remain largely intact, thanks to a series of arrangements that it is fashionable to call “complicated”, which is accountant-speak for “not transparent”.
In order, then, to believe that Sunak’s family would ever have paid multiple millions in inheritance tax, we would have to believe them too naive or principled to use the loopholes with which the rest of their high-net-worth class are familiar. I couldn’t possibly speculate, and it wouldn’t be classy to rake over the non-dom status of his wife, Akshata Murty. Suffice to say, this tax has been optional for the super-rich for ages, and operates as a very targeted, fiscally puzzling levy for the 4% who are rich, but not quite rich enough.
Everything that is wrong, that ever has been wrong, that has ever got worse about British political discourse is distilled in the way we talk about inheritance tax. It was effectively phased out anyway, in the 2015 Finance Act, when the “resident’s nil-rate band” came into effect, for cases where a married couple pass the main home to their direct descendants. Since 2020, the first million quid distributed in such a manner has been exempt. Newsflash: this is the inheritance. The rest of it is silverware with very low resale potential, and maybe a few francs with sentimental value (the sentiment being, “Ah, remember when notes were gigantic and sterling was worth more than everything else? No, me neither, but our beloved parent probably did”).
It is apparently infinite, the number of times we can discuss ending the tax, without remembering that, between the super-rich and the million-pound exemption, it is already over. It is like watching dogs get tricked by a guy who pretends to throw a ball but he has actually hidden it up his sleeve; except, wait, no, that is fun to watch, and this is just deadly.
There follows the obligatory discussion about why people would respond emotionally, to get rid of a tax they won’t have to pay, which brings in money from ranks they will never join, for the good of society they are living in: does this make them aspirational, as Sunak hopes? Or just dozy?
A better question would be: why are we still talking about this? Hey, while we are here, why not talk about the window tax? That was a bummer. Totally ruined my morning light, in the 18th-century mansion I don’t live in.
Rather than have this conversation on the prime minister’s own terms, we should go in studs first: suggest setting inheritance tax at 100%. No windfalls for anyone, ever; total generational redistribution delivered by death, the merry reaper. You may have questions, such as “what’s it all for, if I can’t burnish the prospects of my 58-year-old heirs?”, and those questions may be legit. At least the debate will be different, and more interesting.
Zoe Williams is a Guardian columnist
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