The UK chancellor’s focus on inheritance tax reform is part of a broader effort to address the country’s financial challenges. While there is a consensus on the need for significant reform in inheritance tax, experts argue that it alone may not provide the necessary solution for the pressing monetary shortfalls faced by the government.
Recent budget discussions highlighted proposals for a wealth tax targeting individuals with net fortunes exceeding £10 million, a move that has garnered support from around 75% of the public, according to surveys. Additionally, many citizens favor aligning capital gains tax with income tax, a change that could also contribute to increased tax revenues.
Critics point to systemic inequities in the current tax structure, noting that those with substantial wealth, often inherited or generated from passive investments, enjoy favorable tax treatments compared to lower-income workers in essential jobs. They cite disparities illustrated by high-profile figures such as Rishi Sunak, who, despite being among the wealthiest individuals in the UK, reportedly pays an effective tax rate similar to that of an average teacher, despite earning significantly more.
Proposals for tax reforms, including equalizing capital gains and dividend tax rates with income tax, are suggested as potentially more straightforward solutions to ensure a fairer tax system. There is considerable public discourse surrounding the perception that only individuals earning wages are subject to taxes, while wealth acquired through inheritance may be less taxed, raising questions about equity in Britain’s tax landscape.
Given these considerations, the current debate around wealth distribution and tax fairness remains complex and contentious. Discussions continue on how best to create a more equitable taxation system that addresses the needs of both the wealthy and the general populace.
Source: https://www.theguardian.com/politics/2025/aug/19/how-rachel-reeves-can-raise-money-and-also-make-the-tax-system-fairer