Andy Burnham has backed a plan to increase inheritance tax (IHT) for wealthier families, potentially adding £53,000 to the tax bill for grieving households. The Labour Party's Prime Minister-in-waiting is considering raising the IHT rate to 50 per cent, according to The Mail on Sunday.
Current IHT Thresholds and Impact
Inheritance tax is currently charged on estates worth over £325,000. In 2026, an estimated 27,000 to 31,500 estates are expected to pay IHT in the UK, affecting about 4.5% to 5% of all deaths nationwide. The Office for Budget Responsibility (OBR) projects this proportion to rise to seven per cent by 2030, driven by frozen thresholds and rising property values.
Financial Implications for Families
Wealth management company Quilter calculated that for an estate worth £1.45 million, the current tax bill is £180,000. If the rate increases to 50 per cent, the bill would rise to £225,000 – an extra £45,000. Data shows the average inheritance tax-paying estate paid £212,000 in tax last year. An increase to 50 per cent could raise that to around £265,000, or roughly £53,000 more.
Shaun Moore, tax and financial planning expert at Quilter, said: “While only a minority of estates currently face an inheritance tax bill, the number being drawn into the regime is steadily increasing. Years of frozen thresholds combined with rising property values mean more families are finding themselves unexpectedly exposed.” He added that an increase would have a “meaningful impact” on families but advised taking steps now to protect finances.
Burnham's Previous Proposals
Grant Thornton noted: "On inheritance taxes, he has previously proposed funding a National Care Service with a care levy of 10 per cent payable on ‘everyone’s assets, savings and homes’. This has not been repeated since his emergence as a prime ministerial candidate. More recently, however, The Telegraph has reported that he would ‘look again’ at the Government’s curtailment of inheritance tax reliefs for farmers."
