Some of the UK’s richest families are using inheritance tax loopholes to pass on billions of pounds every year tax-free.
In 2022 alone, 275 super rich families passed on assets worth £2 billion to the next generation without paying inheritance tax, or paying a much reduced rate.
Each of these families passed on assets worth over £2.5 million with reduced or no tax. Collectively, they saved around £700m in inheritance tax.
We uncovered this through Freedom of Information requests to HMRC. And our research was picked up by the i newspaper.
How they do it
Let me explain how these families exploit inheritance tax loopholes.
Agricultural land and businesses benefit from generous tax loopholes when they’re passed from one generation to the next.
This inheritance tax loophole is an attempt by the government to avoid breaking up family farms and businesses when they’re passed to the next generation.
However, the loophole is being exploited by some of the richest families in the UK to pass on their fortunes with reduced tax.
Many super rich families – with no real connection to farming – are increasingly buying farmland in order to exploit this loophole.
The scale is huge
When you look at the data over several years, the amount of assets exempted under this loophole really mount up.
A total of £18.4bn of assets were handed on to the next generation either tax free, or with lower inheritance tax, because of this loophole between 2017 and 2022.
This will have resulted in billions of pounds of lost tax revenue. Money that could have been spent on hospitals, schools, roads or any number of other things.
Anyway, the big companies might get a tax bill for them to consider
