Founders should not be ‘put off’ by inheritance tax, says Treasury minister
A senior Treasury minister, while praising the state of the UK economy, has said entrepreneurs should not be “put off” by inheritance tax.
Emma Reynolds, the chief secretary to the Treasury, on Thursday, at a visit to Numatic International, the makers of the Henry vacuum cleaner, said entrepreneurs should not be “put off” by the tax, as Britain has “very big strengths”.
The minister said the government wanted more successful businesses to launch in the UK and employ thousands.
She argued that the UK economy had positive “economic fundamentals”. However, she said she could not offer founders and investors “any reassurance on the Budget”. She explained: “Yes, we want to see more growth across the country, but we’re starting from a good place. We’ve got the highest growth in the G7, and we’re cutting the deficit more quickly than any other G7 country. Business investment is up, consumer confidence is up.”
The UK had the highest growth in the G7 in the first half of the year, at about one per cent, yet GDP is expected to slow dramatically in the second half of the year.
Some entrepreneurs are partly shielded from inheritance tax charges by the business property relief, which states that the first £2.5m of qualifying firms’ property is 100 per cent tax-free per person. A 50 per cent relief applies to amounts over £2.5m as well as AIM shares, and some land or machinery used by businesses, but some allowances can also be passed on to couples free of inheritance tax.
However, businesses have long complained that a large tax bill falls on new asset owners.
‘No reassurance’ on tax measures
Reynolds also argued that the Treasury was not a “growth inhibitor” even as some of its powers to deliver gains have been transferred to Number 10 North. “I disagree that the Treasury is a growth inhibitor,” she said, according to The Times.
“We, as a department, have two big responsibilities. First, to drive growth in every postcode; second, to ensure that we stabilise the economy and maintain the stability of the public finances as well. We have to do both of those things, and we’re very acutely aware of that.”
She said an early Budget was called to reduce speculation, which was often “inaccurate and unhelpful”.
“We know that businesses are worried about the cost of doing business and the Chancellor … is focused on what more we can do in government to unleash the potential of companies like Numatic, medium-sized companies, as well as the small and large businesses across the country,” she added.