Plugging the black hole: Reforming inheritance tax to unlock revenue and build public support

In this week’s Budget, the government is expected to set out its plans to fill the £22bn ‘fiscal hole’. If widespread media reports are accurate, this is likely to include changes to the inheritance tax regime. In this report, we demonstrate how the government could reform the taxation of inheritance to generate £2.6bn in the current tax year – or around £16bn over this Parliament – in a way that aligns with the values and priorities of the public.

This report is the culmination of nearly three years of research on the economic and public attitudes landscape around inheritance and its taxation. It draws on findings from across Demos’s multi-year Unlocking Inheritance programme, supported by the abrdn Financial Fairness Trust, including economic analysis, surveys, focus groups, and a reviews of inheritance tax systems internationally. It also draws on new analysis conducted for this report, including six two-hour deliberative workshops with a 27-person representative panel, original economic modelling, and discussion with experts.

Find a summary of this report and an overview of the proposed reform package in the associated papers; Plugging the black hole: A Demos Briefing Paper and Winning Hearts and minds.