Rachel Reeves has been accused of 'threatening the stability' of the country. (Image: Getty)
Rachel Reeves has been urged to completely scrap inheritance tax (IHT) as a way to increase overall tax revenue and prevent the mass exodus of Britain's ultra-wealthy.
IHT must be paid when a person's estate is worth more than ￡325,000 when they die, but experts are urging Government reform to increase social spending and personal wealth alike. In 2023, it provided public finances with over ￡7 billion.
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However, the Balearic Government's tax revenue soared to its highest level ever in 2024, despite axing IHT in effectively every circumstance. The islands saw a jump to ￡3.7 billion last year - an increase of more than ￡660 million from 2023.
Now, Britain has been told to follow suit with similar measures that could increase consumer spending, property transactions, and business investments.
John Beck, attorney and founding partner at Beck & Beck Missouri Lawyers, told the Express: "The UK could certainly follow a similar model by reducing or eliminating wealth taxes like inheritance tax while increasing overall tax revenue through higher economic activity.
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IHT is paid when a person's estate is worth more than ￡325,000 when they die. (Image: Getty)
"If done correctly, reducing wealth taxes could prevent capital flight, encourage business owners to reinvest domestically, and increase taxable transactions."
Alan Miller of the Together Association and Farmers to Action also called for IHT to be axed, accusing the chancellor of "directly threatening the stability of Britain" for not stepping in sooner.
He said: "For several decades, governments have pushed home ownership, and one of the only areas to ensure some sense of wealth creation has been in owning a home.
"This then used now to pay for care more often than not, rather than creating the environment for high productivity in investment and wealth creation in the UK. There are many countries that have no inheritance tax whatsoever.
"With many of our businesses and young people leaving Britain due to the impositions across the board on us all, it is time we had a reckoning on this. Rachel Reeves is directly threatening the stability of Britain ... This needs to end now."
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Beck explained that scrapping IHT would need to be balanced by increasing growth or "shifting the burden elsewhere" in the form of other tax hikes.
However, it might not be this simple as Britain relies heavily on IHT to fund essential services and finance the expenses of the Government.
Benson Varghese, lawyer and founder of Varghese Summersett, explained: "Inheritance and wealth taxes provide a significant contribution to the UK's total tax structure, and eliminating them would leave an immediate deficit that would be difficult to replace through alternative means.
"The UK operates under a national tax system that would require major legal restructuring to compensate for lost revenue. Cutting wealth taxes without a clear and quick replacement will result in fiscal instability, making it politically and legally difficult."
The Treasury has been contacted for comment.