Inheritance Tax  

OECD calls for IHT hike to support Covid recovery

“It’s a matter of arithmetic: if the retired/semi-retired population is growing faster than the in-work population, it gets harder and harder to make the numbers add up if you continue to rely on income tax as your main source of revenue. 

“The classic argument against inheritances taxes is that they haven’t raised much money in the past, but the amount of wealth that is about to be transferred over the coming decades is unprecedented in the post-WW2 era.

“This shouldn’t be a question of debt sustainability today – debt is sustainable so long as GDP growth rates remain higher than the cost of servicing the national debt (as a percentage of GDP). But it is a question about debt sustainability further down the line, given rising old-age care costs and a shrinking income tax base.”

sally.hickey@ft.com