Commission calls for property and inheritance tax reforms
A new report has called for national insurance for pensioners, replacing council tax with a tax based more closely on property values, halving SDLT and replacing inheritance tax with a lifetime receipts tax.
The report has been published by the ‘Intergenerational Commission’ set up by the think-tank the Resolution Foundation. The Commission’s 12 members include IFS Director Paul Johnson, CBI Director General Carolyn Fairbairn and TUC General Secretary Frances O’Grady.
The Commission was convened to explore questions of intergenerational fairness that have risen up the national agenda. Its conclusions include that the intergenerational contract is under threat, with widespread concern that young adults may not achieve the progress their predecessors enjoyed.
The report covers a wide range of issues across the policy spectrum, but particularly focuses in on employment, housing and pensions. Its recommendations include:
Replace council tax with a progressive property tax with surcharges on second and empty properties; halve stamp duty rates to encourage moving; and offer a time-limited capital gains tax cut to incentivise owners of additional properties to sell to ﬁrst-time buyers. Abolish inheritance tax and replace it with a lifetime receipts tax that is levied on recipients with fewer exemptions, a lower tax-free allowance and lower tax rates. Use the extra revenues to introduce a £10,000 ‘citizen’s inheritance’ – a restricted-use asset endowment to all young adults to support skills, entrepreneurship, housing and pension saving. Introduce a £2.3 billion ‘NHS levy’ via National Insurance on the earnings of those above State Pension age and limited National Insurance on occupational pension income. Boost employment security via: the right to a regular contract for those doing regular hours on a zero-hours contract; extended statutory rights for the self-employed; and minimum notice periods for shifts. Require ﬁrms contracting for self-employed labour to make pension contributions; lower the earnings threshold above which employees get auto-enrolled; and provide greater incentives to save among low- and middle-earners by ﬂattening the rate of pensions tax relief and exempting employee pension contributions from National Insurance.
The full report can be read here.
George Crozier CIOT Head of External Relations