Eamonn Butler, co-founder of the Adam Smith Institute, is urging Labour to consider the “moral and economic costs” of inheritance tax and calls on the Chancellor Rachel Reeves to avoid raising taxes that could do more harm than good. Butler argues that inheritance tax is out of step with human nature, as most parents have a strong desire to leave their assets to their children. He also highlights the negative impact of an increase in capital gains tax on economic growth, stating that it can deter people from building capital goods and setting up new businesses. Analysis by HMRC shows a 10% increase in CGT could cost the Treasury over £3bn over several years if people reacted by holding onto their assets for longer to avoid paying the higher rate.
