An outspoken agent says he is seeing growing numbers of people renting in later life to reduce their inheritance tax liability.
Trevor Abrahmsohn - owner of high-end agency Glentree Estates, specialising in prime houses in North London - says: “Glentree is dealing with a number of elderly people who have sold their family house and are choosing to rent an alternative home on a long-term basis, to avoid the grievous financial harm of inheritance tax.”
And he says that by not purchasing a property after they sell, the Exchequer is denied Stamp Duty on further property deals.
“However, if there was no Inheritance tax this circumnavigation would not occur in the first place” he notes.
In a blog on his company website he suggests that the UK government has failed to emulate administrations in Australia, New Zealand and Israel which have ditched their equivalent inheritance tax because it had been seen as a tax on middle-class aspiration.
Abrahmsohn asks: “What’s wrong with the ability of families being able to leave their estate to their beneficiaries so that the money can be used to buy property, or anything else they fancy? The innumerate Treasury would earn considerable taxes on this consumption and will recoup some of this lost tax as the capital re-circulates into the system.”
The blog includes Abrahmsohn’s trademark humorous take on serious issues, especially involving swipes at politicians.
For example, he says inheritance tax in this country is unpopular suggesting that “it ranks somewhere below a bout of dysentery and being trapped in a lift with Rachel Reeves.”
And he adds that with the current inheritance tax bringing in only £7 billion annually “the tax is barely enough to cover Therese Coffey’s cigar money.”
He also cites the late Labour politician Roy Jenkins who described this particular tax as ”...a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue.”
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