Inheritance Tax: Cohabiting Siblings

Debate between Baroness Penn and Baroness Hodgson of Abinger

Wednesday 10th February 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, without previewing the Budget in a few weeks’ time, I can reassure the noble Lord that all measures to support families during this difficult time are kept under review. Those reviews take into account the current circumstances that the country faces.

[Baroness Hodgson of Abinger (Con) [V]]

My Lords, inheritance tax hits people when they are at their most vulnerable—when they are bereaved. It is an unfair tax, paid on taxed money by only around 5% of estates, penalising all those who have done the right thing and saved for their old age. Surely we should be encouraging families to live together. Please can the unjust tax situation be looked at again, with a view to remedying this particular situation about siblings?

[Baroness Penn (Con)]

My Lords, the Government understand that individuals work hard to build up their assets to pass on to their families. That is why the nil rate for inheritance tax exists and, as my noble friend has noted, exempts the vast majority of estates from paying inheritance tax. I also note that it makes an important contribution to the funding of public services in this country, equivalent to around 1p on income tax.