![\"Keanu](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/03\/reevespic.jpeg\")
\t\tReeves’ has been urged to scrap inheritance tax. (Image: PA)\t<\/p>\n\t\t\tSunday 15 March 2026 10:30 pm
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tSunday 15 March 2026 2:57 pm\n\t<\/p>\n
\t\tReeves’ has been urged to scrap inheritance tax. (Image: PA)\t<\/p>\n
The UK government is being urged to scrap the inheritance tax system following warnings that that it enforces the UK as a \u201chigh-tax outlier\u201d and risks stifling investment<\/a> and driving entrepreneurs abroad.<\/p>\n A new report from the Institute of Economic Affairs (IEA) highlights that nearly half of the 38 OECD countries \u2013 where members are primarily high-income developed economies committed to democracy and market-based economies \u2013 do not tax bequests to adult children, placing Britain among a small group of high-taxing nations for family succession.<\/p>\n The UK\u2019s inheritance tax (IHT) is a 40 per cent tax levied on an estate\u2019s value upon death, exceeding a standard threshold of \u00a3325,000. This threshold can increase to \u00a3500,000 if a main residence is passed to children. <\/p>\n The report from the IEA argues the tax is a \u201cdistortionary\u201d weight on the economy<\/a>, describing it as an arbitrary extra hit on a \u201cvalue chain\u201d that has already been raided by income tax, national insurance and VAT.<\/p>\n \u201cA nation serious about growth and about giving\u00a0families the freedom to build something lasting, would not levy a 40 per cent charge on wealth that has already been taxed,\u201d Lord Frost, director general of the IEA, said. <\/p>\n \u201cA government looking to boost growth, support\u00a0families and simplify the tax system for fairness and economic competitiveness should consider abolishing inheritance tax.\u201d\u00a0<\/p>\n Inheritance tax \u2018deadweight\u2019 on economy<\/p>\n It comes as the government spent the last year battling backlash from the farming community following its contentious move to scrap tax breaks for family farms in the 2024 Autumn Budget. <\/p>\n The move sparked over a year of nationwide protests and eventually forced a U-turn in December last year, where the government more than doubled the tax-free threshold for agricultural assets to \u00a32.5 million to quiet the row.<\/p>\n