Telegraph

Politics

By Dominic Penna Political Correspondent

Rachel Reeves

Afternoon!

Rachel Reeves is poised to launch a further inheritance tax raid at the Budget this autumn in a sign that Labour will step up its war on wealth.

A fresh inheritance tax grab is on the table Parents may be prevented from making unlimited tax-free gifts to their children under a proposed tightening of inheritance tax rules, my colleague Ben Riley-Smith reports today as Rachel Reeves’s second Budget looms into view.

The Chancellor will have to fill a financial block hole of up to £50bn, more than double the £22bn figure that has long been touted by her party.

Unlimited amounts of assets and money can be gifted to friends and relatives as long as the transfer happens at least seven years before the person giving the gift dies.

But the Treasury is now looking at whether to introduce a lifetime cap on gifts in what would be a second inheritance tax raid in as many years.

A record number of farms have already been forced to close for good after Ms Reeves’s changes to agricultural property relief made the future of thousands of rural businesses unviable.

More than 6,300 agriculture, forestry and fishing businesses have closed in recent months, according to the Office for National Statistics (ONS), the highest level since the data was first published back in 2017.

And while Ms Reeves may find herself in an unenviable position, further changes to inheritance tax, as well as proposed tweaks to capital gains tax, risk having the same sort of unintended consequences for households.

Sir Mel Stride, the Tory shadow chancellor, said: “Those who have worked hard, saved and want to pass something on to their loved ones shouldn’t be punished by yet more taxes from Labour.

“Tax rises are coming to paper over the cracks of the Chancellor’s economic mismanagement. Nothing is safe under Labour – not your job, your business, your farm, your savings or your pension. Rachel Reeves is taxing your family’s future to fund her failure.”