Last week, Britain’s Prime Minister Andy Burnham, in his speech to the Labour conference in Liverpool, turned the political clock back to the 1970s, complete with nationalization, big social spending, and attacks on landlords.
The Conservative leader Kemi Badenoch, at her own party’s conference Wednesday, went even further back—to the Second World War, after which many stately homes and expensive houses had to be sold to pay death duties, helping to kill the Downton lifestyle.
Badenoch promised that if the Tories come to power, “nobody” in the UK will ever have to pay inheritance tax on the family home, the death duty of the 21st century.
Presumably, Earl Spencer, the brother of the late Princess Diana, will be able to hand on the family pile at Althorp, worth some tens of millions of pounds. Not only that, he will be able to shelter another million or so under Badenoch’s additional proposals for family wealth transfer.
This looks highly regressive. Only the wealthiest 5 percent of estates actually pay inheritance tax in the UK, because families can usually shelter around £1 million under the present rules. Inheritance tax is levied at 40 percent on any estate above £325,000, plus an additional £175,000 for homes being passed down to direct descendants. This overall amount is doubled for spouses or where the home is passed to children, hence the potential £1 million shelter (around $1.3 million).
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