Covid-19: Death Duties and Inheritance Tax

Baroness Bryan of Partick Excerpts

Thursday 24th June 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, as I have set out, maintaining thresholds at their current levels will make a contribution towards repairing the public finances following Covid. However, in order to do that job, we will need to take a broader-based approach, and that is what the Government did at the last Budget, including through freezing personal tax allowances and raising corporation tax.

[Baroness Bryan of Partick (Lab)]

My Lords, does the Minister recognise that we have a highly regressive tax system in the UK? The effective tax rate for the wealthiest 10%, counting income and wealth combined, is 18%, and for the bottom 10% it is 42%. In any rational society, this would be reversed. Does the Minister agree with the IMF that wealth taxes need to rise to pay for the cost of fighting the pandemic?

[Baroness Penn (Con)]

My Lords, in fact, the UK has one of the highest levels of wealth taxes in both the G7 and the OECD. We also have a highly progressive income tax system. The top 1% of income tax payers are projected to have paid over 29% of all income tax in 2019-20, an increase from 25% of all income tax in 2010-11.