Nadhim Zahawi and Rees-Mogg lead calls to abolish ‘morally wrong’ inheritance tax

Nadhim Zahawi, the new chancellor of the exchequer, has called for a review of the UK’s corporate tax policy in a clear hint that a rise from 19p to 25p due next year could be reduced or scrapped.

Senior Tory MPs including former chancellor Nadhim Zahawi and Jacob Rees-Mogg are calling for inheritance tax to be abolished.

Prime Minister Rishi Sunak and Chancellor Jeremy Hunt face a call from more than 50 of his MPs to scrap the tax, according to The Telegraph.

Writing in the newspaper, Mr Zahawi suggested scrapping the tax and said it was “morally wrong” to take someone’s assets on their death.

Conservative former Cabinet ministers Priti Patel and Jacob Rees-Mogg are also quoted criticising the tax.

The paper said the Conservative Growth Group of 55 MPs, formed by allies of former prime minister Liz Truss, will publish a paper on the issue as part of a campaign in June to convince the Treasury to abolish inheritance tax when it puts forward the Autumn Statement later this year.

Mr Zahawi said: “Inheritance tax is that other spectre that haunts us alongside death. As well as being morally wrong to take someone’s assets on their death, it also creates all sorts of inefficient and damaging distortions in our personal finances, and the wider economy.”

He added: “The Prime Minister and the Chancellor are doing admirable work to help people through a global inflationary spike and war on our continent.

“By abolishing inheritance tax, they can show that they back families in their desire to pass on their hard-earned savings to the next generation.”

The paper reported that Mr Rees-Mogg also called for the tax to be scrapped, saying: “Death duties are an inefficient form of taxation that is unfair and economically damaging.

“Unfair because it is a double tax on already taxed assets. Economically damaging because it leads to the misallocation of capital, as investments are made to avoid a distortive tax rather than to maximise investment return.”

Tory former home secretary Ms Patel, said: “People should be in control of their income and have the ability to determine the future of the assets they have worked hard to save and build up during their lifetime.

“Substantial long-term reform is required and I would encourage proactive steps to support hard-pressed families across our country.”

Co-chairman of the Conservative Growth Group and former Cabinet minister Ranil Jayawardena said: We need to be bold and abolish inheritance tax altogether – no ifs, no buts. It’s a death tax.

“It’s also a double tax, because it’s a tax on money that has already been taxed. It’s not fair, it’s not Conservative and it’s not very British. It needs to go.”

A Treasury spokesperson said: “More than 93% of estates aren’t expected to pay any inheritance tax in the coming years – however the tax still raises more than £7 billion a year to help fund public services like the NHS and schools.

“Estates of surviving spouses and civil partners can pass on up to £1 million without an inheritance tax liability – significantly more than the average UK home of £285,000.”