Andy Burnham has outlined his intentions to reform inheritance tax (IHT) and stamp duty should he ascend to the role of Prime Minister. The Labour MP for Makerfield, who will be sworn in on Monday in London, made these proposals following a decisive byelection victory that has cast doubt on Sir Keir Starmer's future as party leader.
Inheritance Tax Proposals
Burnham, who previously served as health secretary in 2009, suggested a flat 10 per cent charge on all estates, with the revenue directed toward funding free social care for all. During his Makerfield campaign launch, he stated: “It’s not about asking people to pay more… [they are] paying in the most unfair way possible at the moment. I think there’s a much better way of doing it.”
However, Sean Drury from the accountancy firm Blick Rothenberg cautioned: “These sorts of structural tax changes take a long time and are hard to implement. There are also a lot of unintended consequences.”
In the shorter term, Burnham has indicated he would revisit the government's new inheritance tax rules for farmers. These rules, effective from April, make farms valued over £2.5 million liable for a 20 per cent inheritance tax.
Stamp Duty and Council Tax Reform
In 2010, Burnham advocated for stamp duty and council tax reform. Writing in The Guardian, he proposed replacing stamp duty with an annual tax on the rental value of land. This month, he described council tax as “highly regressive” and argued for a “big case for land and business and property tax to be changed.”
Robert Gardner from Nationwide Building Society commented: “From a theoretical perspective, land or property value taxes are among the most economically efficient forms of taxation. They are difficult to avoid and don’t discourage transactions in the way that stamp duty does. However, much depends on the detail of any reform.”
Market Reactions
Neil Wilson from Saxo Capital Markets noted: “He is definitely seen as the least market-friendly of the potential Starmer replacements. There is clearly a market response to him, and I think it is linked to his persona, rather than to a broad view that Labour is moving a bit more left.”
Tom Bill, head of UK residential research at Knight Frank, added: “It won’t be a top priority but a move to tax the asset rather than the transaction appears to be on Burnham’s radar. He supports a proposal by campaign group Fairer Share, which wants to replace stamp duty and council tax with a levy equivalent to 0.48 per cent of a property’s value. The simplicity of the proposal is commendable and scrapping stamp duty makes sense given how it hinders social and economic mobility, but the proposal in question feels too overtly political. Shouldn’t the sole aim be to maximise tax revenue?”
