Sir – The far-sighted traditional preamble to the Constitution of the UK Liberal Party (not the Liberal Democrats) calls for “Liberty, Property and Security” for all. The Inheritance Tax exemption should not be increased to £1m.
The ownership of wealth in our country is ever more dangerously unequal.
Some inherit billions, free of tax: others inherit nothing. David Cameron, the Conservative Party and UKIP should be thinking of ways to create a genuine Opportunity Society for all, instead of destroying it.
The UK Liberal Party calls for Inheritance Tax to be dropped to 10 per cent.
All its vast and unlimited exemptions for land, business assets and lifetime gifts should be abolished, except for modest annual amounts.
It is no worse for being double taxation on the luxury of generous giving than is VAT on ordinary spending.
But it is a 40 per cent tax on the total given and left, regardless of how narrowly or widely it is shared between beneficiaries. Reform it into a 10 per cent Capital Donor Tax. Then introduce a true Inheritance Tax, a progressive Accessions Tax on cumulative lifetime totals of unearned capital gifts and bequests above a certain amount. The more you receive during your lifetime, the higher rate of tax you pay.
The proceeds of the 10 per cent Capital Donor Tax and a progressive Accessions Tax above a certain level should be used to create a genuine Opportunity Society with UK Universal Inheritance for all UK-born UK citizens at 25.
Introduce it at £1,000 in the first year. Increase it annually by that amount for ten years or more, up to about £10,000, roughly 10 per cent of average wealth in the country.
Gradually this will reduce alienation, financial and social exclusion, young adult and young parent poverty, enable earlier repayment of student loans and increase entrepreneurial and home ownership opportunity.
Dane Clouston, Stadhampton