A progressive Capital Receipts Tax on cumulative lifetime receipts of capital that has been neither created, earned, made nor saved by the beneficiary would encourage donors to spread wealth around to those with less inheritance than others.

Perhaps you might have said that the present ‘Inheritance Tax’ (Capital Gifts, Bequests and Estates Tax) is at far too high a flat rate, leading to exemptions for every kind of pressure group. All inter-generational exemptions could be abolished. The rate of the present tax could be slashed from 40 % to the starting rate - say 10 % - of the progressive Capital Receipts Tax. The tax on giving would be treated as a recording and withholding tax, offsettable against the tax on receiving, so that modest beneficiaries will have nothing to pay on what they receive.

As so often argued, the present ‘Inheritance Tax’/Capital Gifts, Bequests and Estates Tax is indeed a tax on after tax income, but so are VAT, Council Tax, fuel tax and other taxes on expenditure. It is a double tax on the pleasure giving luxury expenditure of giving and bequeathing. What of it? 10 % is considerably less than VAT.

Looking at a comparison with the present tax, the two taxes taken together will still put a break on house prices, with sales of buy to lets and second homes. The present tax exempts those who have inherited their wealth tax-free as well as those who have created it. There will be only intra-generational, not inter-generational, exemptions from the 10 % tax on giving: the need for exemptions from the tax on receiving, if any, will depend upon the progressive rates. How much more does anyone need of the next £100 million? Passing the benefits of home ownership from one generation to the next is done via cash in most instances, where there are more beneficiaries than one.

The present ‘Inheritance’ Tax does not reallocate wealth. It just takes capital away from beneficiaries (and very little from the wealthy because of all the exemptions) without giving any capital to others. A progressive Capital Receipts Tax would help to spread giving more widely. But in order to re-allocating the private ownership of wealth, the Capital Receipts Tax must be both negative (with a British Universal Inheritance at 25 of, say, 10 % of average wealth) and progressive (starting at 10 %, with transferable tax credits). As mentioned elsewhere, the average wealth of every adult and child in the UK was £85,000 in 2002, according to the Office for National Statistics, as reported in The Times. So a £10,000 figure for British Universal Inheritance would be realistic with modest progressive rates, according to political taste, of the Capital Receipts Tax.

As for which party for which you might be Chancellor, you might like to note, if you are persuaded by the above, that this policy proposal was adopted at the 120th Annual Assembly of the Liberal Party (not the EU-fanatic Lib Dems) in 2005!

Now, how about getting comment from government on what you propose - or getting it to the papers because even the Guardian failed to see what AD was really doing.

Nick

I talk to all main parties

I am not a member of any

But I guess as I’m not yet 50 (by a whisker) and only drink in decided moderation I might qualify for some vacancies…..

Richard

I’m interested to know on behalf of which of the main parties you would be most likely to be making this speech?

PS I hear there is a recent vacancy at the top of the Lib Dems………