IHT should apply equally across all assets, says IFS

Commenting on the Budget proposals to cap agricultural and business property reliefs and the well- publicised debate around the potential affects on the farming industry the Institute for Fiscal Studies suggests that if IHT is to exist it should apply equally across all types of assets contending that ‘relief for agricultural and business assets unfairly favours those whose wealth is held in these forms rather than others’.

If the government wants to promote certain uses of land including producing food ‘it would be fairer and more efficient to explicitly target support towards the activities it seeks to promote’ says the IFS rather than using the tax system. This would help support farms carry out the desired activity rather than providing a more general relief for estates which are used for other things and would minimise IHT avoidance. In essence there...