by Elliot Keck, head of campaigns
The TPA as a rule does not comment on an individual’s tax affairs, particularly when there is no evidence or allegation of illegal activity.
The reason is simple: everyone has a right to arrange their tax affairs in the way that best suits them and their family, providing it is within the law. And these arrangements, provided they are within the law, should be private. We have the highest tax burden for over 70 years, and one of the most complicated tax systems in the world. Paying more money than is necessary to a greedy, wasteful state is not the responsibility of any taxpayer.
Politicians in power need to recognise how grotesque our tax system is. The number of taxes, the number of thresholds, the differing allowances, exemptions and rates is mind-boggling. Loopholes will be exploited, mistakes made. None of this is helped by the appalling conduct of HMRC, our tax collector
Surely the two worst taxes on the books, at least when revenue raised is taken into account, are stamp duty and inheritance tax. Stamp duty is a tax on moving house. That would be a disaster at any time, but is doubly-so during a housing crisis. There are a remarkable four rates and thresholds, an exemption for first time buyers and an additional rate for
second home purchases. Inheritance tax is the arbitrary seizure of someone’s assets when they die. Remarkably, it even applies if these assets were transferred up to seven years before death. It sets the principle that an individual’s wealth is not theirs to do with as they please.
What is this government doing about these two toxic, terrible taxes? On stamp duty, they abolished the relief for first time buyers introduced in 2022. From 2022 until this year, first time buyers paid no stamp duty up to £425,000 and a reduced rate of 5 per cent up to £625,000. Now they pay 5 per cent above £300,000.
On inheritance tax, Labour rightly spotted that some wealthy individuals make use of a number of loopholes to limit their tax liabilities. Namely, they use the tax-exempt status of pension funds, agricultural property and family businesses to significantly reduce the tax bill at the point of death. The answer to this problem was of course to abolish inheritance tax - no need then for anyone to hide their wealth away from the prying eyes of the tax man. That was not the course they took, instead choosing to cripple family farms and businesses and to target pension pots.
And in this upcoming budget, there are credible calls for taxes on property wealth, and for capital gains taxes to be applied on primary residences.
Perhaps the Deputy Prime Minister will consider joining the TPA’s campaigns to scrap inheritance tax and stamp duty. We have written to her to ask her to do just that…