Death and Taxes: Why Inheritance Tax should be replaced with a Capital Receipts Tax
There is a strong case on the grounds of equality of opportunity for taxing inheritances. Large inheritances give some people an unfair and unearned advantage in life.
Supporters of taxes on wealth in the UK have weakened their case by defending the current Inheritance Tax regime in spite of its deficiencies. Inheritance Tax as presently formulated is highly unpopular, raises little money and can be avoided by the very wealthy. It is also not a tax on inheritances, but a tax on estates. It could be reformed, but a better option would be to abolish it and replace it with a Capital Receipts Tax.
A Capital Receipts Tax would be a fairer means of increasing equality of opportunity. The UK should introduce a progressive tax on lifetime gifts above a certain threshold.