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Rishi Sunak’s wealth tax … on the sly: Government ready to raise £ 90bn through inheritance and capital gains taxes in a blow to the middle classes, documents show
- The amount families will pay for inheritance and capital gains tax will skyrocket
- The Treasury will collect taxes amounting to 35 percent of national income in 2025
- Rishi Sunak is freezing the inheritance tax threshold and capital gains tax relief
Estate taxes will cost households nearly £ 90 billion over the next five years in a big windfall for the Treasury.
The amount families will pay in inheritance and capital gains tax will skyrocket as the government hits the middle classes, budget documents show.
In addition to raising extra money through income tax and corporation tax, the Chancellor is freezing the inheritance tax threshold and capital gains tax relief.
Estate taxes will cost households nearly £ 90 billion over the next five years in a big windfall for the Treasury. Chancellor Rishi Sunak appears above on budget day last week
These stealth taxes spell misery for millions of Britons who have invested their hard-earned savings in property, stocks and other assets.
It occurs when the total tax burden on families is at its highest level in more than 50 years.
Figures hidden in the documents show that the Treasury will collect taxes worth 35 percent of national income in 2025, the most since the late 1960s.
Sam Collins, policy advisor to the think tank of the Institute of Economic Affairs, said: “ Instead of increasing the tax burden on businesses and individuals, the Chancellor should go for growth and take radical steps to simplify our tax code. , leaving more money in the market. hands of individuals, families and companies’.
Figures from the Office of Budget Responsibility (OBR) show that the Treasury earned £ 14.9 billion from capital gains and inheritance taxes in 2019-20. But by 2026 it will generate £ 21 billion, an increase of 41 per cent.
The figures also show that the tax collector’s capital gains tax collections will rise from £ 9.8 billion last year to £ 14.4 billion in 2026, an increase of 47 percent. The lien is paid on the profits made when an asset is sold, such as a vacation home or stocks.
Critics argue that the inheritance tax is increasingly becoming a tax on the middle classes.
Properties worth up to £ 325,000 can be passed on without paying inheritance tax, or £ 500,000 if you are passing your home on to children or grandchildren.
There is a 40 percent levy above that threshold. For married couples, the threshold is £ 650,000, or £ 1 million if you include the house.
Figures from OBR show that the tax raised £ 5.1 billion last year. But it is expected to reach £ 6.6 billion in 2026, an increase of 29 percent.
The figures also show that the tax collector’s capital gains tax collections will rise from £ 9.8 billion last year to £ 14.4 billion in 2026, an increase of 47 percent.
The lien is paid on the profits made when an asset is sold, such as a vacation home or stocks. Higher rate taxpayers pay 28 percent on earnings on residential properties and 20 percent on other assets.
Taxpayers with a basic rate pay 18% and 10%.
Collins said: “Estate taxes lead to economic distortion, hurting businesses and individuals.
The Chancellor maintains that investment is key to our economic recovery, but capital gains tax has the reverse effect. At high levels, it discourages investment, discourages entrepreneurship, and encourages tax avoidance.
The inheritance tax is known as Britain’s most hated tax for a reason. Not only is it immoral as a form of double taxation, but it is a bureaucratic nightmare for families. “
