CIOT/CenTax Conservative fringe debate: Can we design a tax system which taxes wealth and capital fairly and is pro-growth?

The panel

Nichola Ross Martin, CIOT President (Chair)

John Barnett, CIOT Vice President and a partner at law firm Burges Salmon

Andy Summers, Director of Centre for the Analysis of Taxation (CenTax), Associate Professor at LSE Law School and a co-author of the 2020 Wealth Tax Commission report

Rt Hon John Glen MP, Member of the House of Commons Treasury Committee, Parliamentary Private Secretary to the Leader of the Opposition and a former Treasury minister

The context

Debate is raging around the taxation of wealth. Some Labour figures, including ex-leader Neil Kinnock, have expressed support for an annual wealth tax targeting the richest individuals. The Green Party also supports such a tax. Would such a tax provide a fair way to pay for public services, or would it risk driving away investors and wealth creators?

And what about the ‘wealth taxes’ we already have. The government has scrapped non-dom tax status, raised capital gains tax and is about to bring family farms and other businesses, and pension pots, within the scope of inheritance tax. Is this the right approach? And what does a Conservative approach to taxing wealth and capital look like?

Those were some of the questions that framed CIOT’s 2025 Conservative Conference fringe debate, held in partnership with the Centre for the Analysis of Taxation (CenTax).

The fringe event was held on Monday 6 October at the Manchester Central conference centre. The Chair, Nichola Ross Martin, welcomed the roughly 85 attendees and expressed her pleasure at hosting the event at the conference with CenTax. She observed that taxing wealth is a current hot topic and looked forward to a lively debate.

Andy Summers of CenTax said that Nigel Lawson was the last Conservative chancellor who had a strategy for the tax system and seriously considered tax reforms. He said that, since then, with a few exceptions, budgets have tended to be characterised by an obsession with tax rates going up or down. He believed that debates on tax reforms often overlook the “tax base”, suggesting there are more effective methods to increase revenue.

Discussing inheritance tax, Summers stated that “there is a good reason to treat agricultural and business property differently from other forms of wealth”, referencing CenTax's work on this topic. This included its idea of a “minimum share rule”, which would enable the government to increase the combined allowance to £5 million per estate by withdrawing the relief completely from estates whose agricultural and business property make up a small share of their total wealth.

Summers ended his remarks by offering the view that there is “zero chance” that Labour will introduce a wealth tax at the upcoming Budget, as the government and HMRC currently do not have the capacity to deliver this kind of tax.

John Barnett of CIOT said that changes to the non-dom rules were overdue as the previous regime had many anomalies. The biggest problem with the non-dom changes, however, was including inheritance tax – or, at least, inheritance tax at its current very high levels.

Barnett highlighted a number of challenges associated with implementing a wealth tax, including liquidity and mobility issues, potential deterrence of wealthy individuals from staying in or moving to the UK, and administrative burdens. He also raised a philosophical concern about defining ‘real’ vs ‘unreal’ wealth, suggesting that real estate is different from other wealth types because it cannot be relocated. Acknowledging that the UK already imposes high taxes on real estate at acquisition and inheritance, he said, “it seems to me that we tax it at the wrong points of the cycle”.

Barnett expressed concern about the UK’s high inheritance tax rate compared to the rest of the world, referencing a past all-party parliamentary group proposal for a flat 10–20% inheritance rate with minimal reliefs, which could address some existing issues.

John Glen reflected on his time in government, highlighting the gap between the principles and policies in theory and the practical realities of navigating the politics. He criticised proposals to change agricultural and business property reliefs, suggesting that the changes would unfairly impact farmers and the rural economy in particular.

Glen said that increasing tax burdens on wealth creators risks discouraging investment and employment, especially as costs like the national living wage rise. He also highlighted the challenges in introducing a wealth tax, such as valuing diverse assets and dealing with asset mobility, agreeing that he sees it as unlikely to happen, as well as undesirable.

The Conservative MP concluded that wealth and capital cannot be taxed in the same way as income because of the risks involved in business investment. He also argued against aligning capital gains tax with income tax, stating that this would be unfair to entrepreneurs taking financial risks.

Q&A

During the Q&A, one questioner asked about what could be done to get more consensus on tax policy. “It’s difficult”, conceded John Glen, reflecting on the challenges of getting nuances and trade-offs understood by the electorate. “The way our media works, through social media, things are clipped, truncated and misrepresented and we end up with a pretty unedifying discussion most of the time.” He and others are trying to change this but it’s not easy.

Andy Summers said he was more optimistic about an emerging degree of consensus on a lot of tax changes, at least at think tank and economist level, including between those on the left and right. John Barnett said there was a lot of consensus on corporate tax.

On a question about the personal allowance, Summers said that increasing the allowance is “less progressive”, suggesting that it is twice as valuable to higher earners and to double income households. “It’s quite expensive as well,” added Glen.

On taxation on immovable assets, such as physical property, Barnett explained that regardless of the owner's place of residence, any property physically situated within the UK remains subject to UK tax jurisdiction.

The topic of having a flat rate subsidy for pension contributions was also mentioned, with Barnett expressing support for, say, a 30% tax relief for all. Glen stated that it is not the Conservative Party's current policy to have a single rate, but acknowledged there is potential for adjustments to the rate. He posed the question of what the role of the state is in this matter, saying: “There are lots of people receiving 40% relief to build up pension pots which are much more than just securing a reasonable pot for retirement alongside their triple-locked pension.” There might be better ways to spend that money, he suggested, for example in tax cuts elsewhere.

All views expressed during the debate were speakers’ own and do not necessarily reflect the views of their employers or bodies they represent