When a Chancellor kicks the can down the road, it’s never good news for the taxpayer. You can double that with Rachel Reeves. She learned it all from Gordon Brown, the master of lies and financial deceit.
You may remember last October she announced, with the minimum of fanfare, unused pension pots will from 2027 (can kicked!) be included in your estate, making them subject to a tax of up to 40 per cent.
What she didn’t make clear, for very good reason as it now emerges, is the cost that her decision will mean to your family.
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For instance, if you live in London, the sting for your family will be £192,000. And the average across the whole of the United Kingdom will be £82,000. These are big numbers. At the time, Reeves made it sound like it was a small, technical beer.
Rachel Reeves' deceitful tax will leave you £82k poorer. And that's not even the worst of it - Kelvin MacKenzie
|Getty Images
She’s such a dissembler, deceiver, and to finish off a dud.
This is how the numbers work, which come from Quilter, the wealth management business.
A working-age single homeowner in England with an average-priced home of £290,395 and a ‘’moderate’’ pension pot of £415K would face an IHT bill of £82K.
With the same size £415K pension pot, a Londoner’s family would have to cough up £192K because house prices are double the national average at £565,637.
The effect of the new Reeves tax is that the number paying death duties will rise from four per cent today to 9.5 per cent by the time Labour are kicked out of office by 2029.
The only good news on the horizon is that voters, for the first time in my experience, will be fully wired of how inheritance tax is going to affect them.
And this is why Nigel Farage’s decision to announce really early that Reform will scrap the death tax is slam slam-dunk winner.
Makes me laugh that Labour is now demanding that Reform explain how they can afford to dump inheritance tax. I have two answers to that.
The first is I don’t remember Starmer or Reeves ever announcing in their manifesto that they intended just three months after being elected, they would increase taxes by £40billion and therefore Farage could simply stay schtum. It worked for Labour.
But actually, I would be a lot bolder if Farage said he's going to slash benefits. Everybody would cheer. And he needn’t announce which ones were going to go.
That way, all the crooks and charlatans on welfare will be fearful that their game is up. Too many have been living well off people who have to get up and go to work every day.
There are some shocking stats coming out of the DWP, probably better named the Department of No Work and Little Pension, which show that there is a growing cohort, a huge number over 50, on Universal Credit using the money (our money) as a way of taking early retirement.
The split is like this. There are 1.3million aged over 50 claiming benefits compared to one million under-35s.
Of the 1.3million over 50s, 650,000 don’t have to look for work. The money keeps popping up in their bank accounts without them having to do anything at all.
That is not right, and I’m looking forward to Farage doing something about it and using that money to scrap inheritance tax. Australia appears to have got on quite comfortably without, and you would have to have assets of around $20million in the United States before Uncle Sam got his mitts on your mum or dad’s money.
The problem with Labour is that they look upon your money as everybody’s money. It isn’t. You don’t mind doing your bit, but why should you work so that others might lie in bed all day or spend the afternoons in the betting shop and the evenings in the pub?
That culture has left us skint and dispirited. I am looking to Reform to cheer me up and leave me wealthier.