Andy Burnham, the newly elected Labour MP for Makerfield, is reportedly considering a proposal to increase the inheritance tax rate from the current 40% to 50%. This move, supported by the Labour-affiliated Institute for Public Policy Research through its Commission on Health, aims to raise additional revenue and could significantly affect wealthier households.
According to wealth management firm Quilter, estates valued at approximately £1.45 million could see their inheritance tax bills rise from £180,000 to £225,000—a £45,000 increase. HMRC data indicates that estates subject to inheritance tax currently pay an average of £212,000, a figure that would climb to about £265,000 under the proposed 50% rate, representing an additional £53,000 cost on average.
Shaun Moore, Quilter’s tax and financial planning expert, notes that the number of estates subject to inheritance tax is growing steadily due to frozen tax thresholds and increasing property values. More families are finding themselves unexpectedly liable for this tax, highlighting the real-world impact of such policy changes.
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Burnham is poised to replace Sir Keir Starmer as Labour leader and is expected to become Prime Minister shortly thereafter. In an online meeting with parliamentary Labour party members, Burnham emphasized his commitment to fostering unity, accountability, and accessibility within the party. He expressed the importance of building a government that listens closely to communities, ensuring that policies are well-informed and effectively implemented.
The former Greater Manchester mayor also highlighted the need for a cooperative approach within Labour and the country at large during this critical time. His leadership aims to value every voice and deliver justice and security, particularly in light of recent national challenges.