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Super-rich face call for 50% IHT

Inheritance tax should be raised to 50 per cent for the wealthiest people, says the Institute for Public Policy Research.

The thinktank believes the inheritance tax system needs to be made fairer. It is recommending that tax is cut for middle-class families, with extra revenues being raised from the wealthiest.

It suggests these should be invested for poorer children through the child trust fund.

A flat rate of 40 per cent is currently paid on estates over £263,000. The IPPR&#39s proposals would see those in the £263,000 to £288,000 bracket paying 22 per cent, those between £288,000 and £763,000 paying 40 per cent and those with estates worth £763,000 or more paying 50 per cent.

But some IFAs believe that if the suggestions were implemented, people would be deterred from building up estates in the UK.

IPPR researcher Dominic Maxwell says: “A fairer inheritance tax would see the very wealthy, who are comfortably over the threshold, pay more while the vast majority of families that are currently taxed would pay less.”

Brunning Newman Houghton director David Brunning says: “This is entirely vote-grabbing and comments that it will only hit the super-rich are rubbish. It will hit those who are asset rich and cash poor because of rises in house prices while the reduction will only hit a minute number of people.”

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