The super rich can protect their fortunes without the help of threshold raises, which are negligible by their standards in any event. James Macintyre proves as much in his latest New Statesman column. When detailing Tory donor Lord Harris’s IHT avoidance, Macintyre writes:
‘The Tory peer, whose wealth is estimated at roughly £285m, donated £90,000 to Cameron's campaign. In 1997, he sold £23m of shares - shares that would have been liable for inheritance tax - and used the proceeds to buy artworks, which are exempt from inheritance tax.’
This casual reference to ‘artworks’ makes Lord Harris sound like a compulsive bric-a-brac enthusiast. Surely anyone can do this? But art is only exempt when listed on the Register of Conditionally Exempt Works of Art. The Duke of Sutherland’s extortionately overpriced Titians don’t grace that list: the contingency that Grandma’s Apostles’ Spoons have sneaked in is remote.
After the 12 year property boom, huge numbers of modest earners now posthumously pay the government for the privilege of having snuffed it. They should not do so. Take one example: a family friend, who was a career soldier rising to the rank of Colour Sergeant, retired to a two-up two-down in suburban Essex and lived off a combination of state and service pensions for 27 years. He died in 2006 and his estate yielded £84,000 in inheritance tax. The deduction means that a maximum of 3 of his 4 grandchildren will enjoy the opportunities that a private education can offer; he had intended all four to do so, among other things, such as enabling his children to move up the property ladder.
Inheritance tax penalises aspiring Middle England. The Labour party knows this, which explains its proposed threshold hike when it was interested in winning marginal seats south of the River Trent. The Tories shouldn’t give an inch, an IHT cut is precisely the sort of beneficial pledge they should make.