RISHI Sunak is looking at clawing back nearly £1 billion from the well-off who dodge inheritance tax to raise cash for Boris Johnson’s infrastructure splurge in the Budget.
The Sun understands the Chancellor is mulling closing two tax reliefs rich families use to funnel money through ghost companies and farmland before they die.
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Rich Brits cut down the amount of inheritance tax they have to pay by setting up a business or buying land, which can be passed on to their family after death.
Agricultural Relief and Business Property Relief can protect between 50 per cent and 100 per cent of money invested from inheritance tax.
Ending Business Relief would raise the Treasury an estimated £480 million a year and stopping Agricultural Relief would bring in £320 million.
The extra £800 million revenue would help the Treasury in its efforts to find cash to pay for a £100 billion infrastructure revolution promised by the Prime Minister.
Adam Corlett from the Resolution Foundation said: “The gaping loopholes in our inheritance tax system help the super-wealthy avoid paying their fair due, and undermine wider public trust in the tax system.
“Scrapping or scaling back these loopholes could raise up to £800 million – money that could be far better spent on helping to ‘level up’ living standards across the country.”
Stuart Adam from the Institute for Fiscal Studies said: “If the Chancellor is looking to raise revenue there are a number of reliefs in IHT that he could look at.
“It is hard to see why some assets are treated in a different way than others.”
In a separate report last night the IFS warned that Mr Johnson that even under current policy the Government is at risk of busting its rules to balance the budget over a three-year period.
It says that with borrowing not forecast to fall before 2022/23, the Government will have to choose between either tax rises or abandoning the strict fiscal rules in the Tory manifesto if it wants to avoid day-to-day spending cuts after next year.
It comes as a report said the Government’s proposed infrastructure projects will only catch up with the country’s lag in building and do not represent a comprehensive strategy to meet the UK’s challenges.
The National Infrastructure Commission study warned that “money alone can’t make up for months of lost time on some programmes, and government now needs to set these funding pledges within a cohesive long-term plan”.
