The abolition of the Inheritance tax should be at the heart of the Conservative manifesto to be published this week, according to a former Cabinet minister.
Nadhim Zahawi, the former Chancellor who is stepping down as an MP, argues there would be huge public support for scrapping “the most unfair tax we levy”.
He argues that the “deeply unpopular” tax’s abolition would simply be “good economic policy”, benefitting Brits and winning public favour for the Conservatives.
Mr Zahawi described the IHT as “a triple tax” as it represents an income tax, a tax on savings and investments before the “taxman comes for one final go” on your deathbed.
The former Chancellor also highlighted that the tax disproportionately affects the less wealthy as the wealthiest in society will always find a way to get around “the vast array of exemptions and carve-outs.”
Mr Zahawi said that this will become especially difficult for Brits as fiscal drag brings more people into the IHT threshold.
He argues that small family-run businesses are put under particular stress as they do not have shareholders who can sell their shares on the stock market to avoid paying tax on them and additional tax strain falls on the company’s head.
This means this smaller homegrown business could be forced into bankruptcy and closure.
Mr Zahawi also highlighted the misfortune of individuals who received a gift from a relative if there is a death within seven years who would be hit with the tax.
The former Chancellor called the £7 billion raised through Inheritance tax a “drop in the ocean” compared to the overall tax take and that “it may be more of a hindrance than a boon to the Exchequer.”
Writing in the Telegraph, Mr Zahawi said: “The Chancellor hardly needs me to tell him that abolishing inheritance tax would represent a clear commitment to our principles.
“After all, it was he who only very recently called it “profoundly un-Conservative”. And his recent cuts to National Insurance and ambition to eventually get rid of it altogether shows that he absolutely understands the need to prevent unjust double taxation.
“Making the abolition of inheritance tax a key manifesto pledge is therefore a clear opportunity to demonstrate that Conservative values and British values are one and the same.”