Britain’s controversial inheritance tax scheme has been slammed as the “most unreasonably high” levy in the UK by high-income individuals in a landmark poll.
Wealthy Britons are bracing for tax hikes as the Spring Budget approaches, with a staggering 83 per cent expecting increases in the coming year.
Capital gains tax (CGT) tops the list of concerns at 38 per cent, closely followed by income tax at 37 per cent.
Specially, IHT is causing significant anxiety, with 35 per cent of high-net-worth individuals anticipating changes when the Chancellor delivers her statement on March 26.
These findings come from the latest Saltus Wealth Index Report, which surveyed individuals with at least £250,000 in investable assets.
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High-income Britons are slamming Labour over their changes to inheritance tax
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The survey of 2,000 high-net-worth individuals reveals a striking political dimension to these tax concerns. Two-thirds (66 per cent) of wealthy Labour voters now regret their decision in the 2024 election.
The introduction of VAT on private school fees has particularly rankled wealthy Labour supporters. Changes to IHT thresholds have also fuelled discontent among this demographic.
Furthermore, the upcoming National Insurance contribution rate increase for employers to 15 per cent from April 2025 is another sore point.
Some 15 per cent of Labour-voting HNWIs specifically cited this employer NI hike as their reason for regretting their vote.
Inheritance Tax has emerged as a particular flashpoint, with a quarter of respondents labelling it the most unreasonably high tax in the UK.
An overwhelming 88 per cent believe the IHT threshold should be increased. One in four wealthy individuals (25 per cent) go further, arguing the tax should be abolished entirely.
These concerns have intensified after Labour extended the freeze on IHT thresholds until 2030. This extension means more families will be pulled into the tax net as asset values rise with inflation.
Wealthy individuals are actively responding to these inheritance tax concerns with concrete financial planning. A third (33 per cent) of high-net-worth individuals report accelerating wealth transfers to their children during their lifetime.
This strategy aims to reduce eventual inheritance tax liabilities by gifting assets before death. A similar proportion have sought professional financial planning advice specifically focused on managing their IHT exposure.
Beyond personal tax concerns, wealthy individuals see the UK’s overall tax burden as damaging to economic growth.
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More than four in ten (43 per cent) believe high taxation is holding the economy back. This represents a dramatic increase from just 23 per cent who held this view before the last Budget.
Mike Stimpson, a partner at Saltus, said: “The expectation of further tax rises, particularly around IHT, is raising alarm among high net worth individuals, who play a crucial role in the UK economy as business owners, employers and investors.
“The latest data reveal that IHT is viewed as the most unreasonably high tax, with more estates being pulled into the tax net due to frozen thresholds.
“This tax makes the UK a relatively unattractive location for people who create wealth. As the Chancellor’s Spring Forecast approaches, there is growing pressure for meaningful reform, but it remains to be seen whether the Government will address these concerns or press ahead with further tax increases.”
