Here is a question. Is this the most cold-hearted government we have seen in our lifetimes?
Having closed off many avenues of raising money from the living it now seems hell-bent on extracted as much as it can from the dead – or more precisely their bereaved spouses and relatives.
Say what you like about Tony Blair and David Cameron, at least they had their fingers on the pulses of Middle Britain. Even Gordon Brown had a decent political instinct that prevented all but a few blunders.
This government has set itself up as a 21st century grave robber by replacing the probate fee with a probate death tax and ripping into bereavement benefits. I do not know whether the blame for the lack of empathy should be laid at the door of Number 10 or Number 11.
But the Downing Street cat appears to extend more sympathy to a stray mouse than Theresa May and ghoulish Philip Hammond have shown towards widows and bereaved families.
The probate scandal has deepened as the Ministry of Justice and HMRC have struggled to cope with the numbers of distraught relatives rushing to beat a May deadline, when forms must be lodged. Those who miss the deadline face fees of £1,000 on modest estates of just £300,001, to £4,000 on those over £500,000 and up to £20,000 on £2m-plus estates.
If this punishing tax must go ahead would it not be fairer to base it on the date of death rather than forcing the bereaved and bewildered to scramble to beat a filing deadline and possibly have to take a substantial loan to boot?
If this were not enough, the government is also slashing the maximum length of bereavement payments from 20 years to 18 months. Now, I agree 20 years was too long to keep paying. But, equally, 18 months is scandalously short.
Is a widowed parent with two very young children really supposed to put their life together again in this time? Both measures smack of a government that is more comfortable moving numbers on a spreadsheet than with confronting the real issues and financial worries faced in everyday life.
Perhaps those juggling the numbers are so wealthy themselves that they have no idea what life is like for someone working in a normal job and living in a small property in an average town in Britain. Heartless, uncaring, unfeeling and devoid of empathy. That just about sums this government.
But, with an opposition intent on fighting itself, there appears to be no one in parliament ready to stand up for the bereaved.
Inheritance tax residence allowance
While we are on the subject, the new inheritance tax residence allowance starts next week. Despite this, the annual amount raised by this loathed tax is estimated to rise to £6.2bn in 2021/22.
This compares with £4.7bn for the year to April 2016, which itself was a 22 per cent increase on the previous year.
What’s more, the Office for Budget Responsibility is predicting that across the period to 2021/22, IHT will raise £1.8bn more than it had forecast as recently as the autumn statement.
The new residence allowance will offer relief for some with its £100,000 per person tax-free allowance on a home from April 2017, rising to £175,000 in April 2020.
Spouses and civil partners will effectively have a £1m IHT allowance from April 2020. But there are caveats with estates worth more than £2m gradually losing the benefit. Most vicious of all is that this is only available to direct descendants.
This rules out siblings sharing a property. It also discriminates against those who either could not or chose not to have children. Nieces and nephews apparently do not count as direct descendants.The new tax dodge for the 21st century? IHT adoption, I suspect.
Pension policy charges
If you ever wondered how much money was being made by high-charging old pension policies then look no further than Phoenix Life’s announcement that the exit fee cap will cost it about £10m. Last year the company had confirmed that 70,000 policyholders aged over 55 faced exit charges of more than 1 per cent.
But, of course, this is just the cost of a charge cap on those who choose to leave – not those who remain or simply leave a policy paid-up. If more people rush to the door once lower charges are established presumably the loss will be greater.
However, I am sure this has all been worked out by the actuaries – and they never get anything wrong, do they?
Tony Hazell writes for the Daily Mail's Money Mail section
