Starmer loves gifts from rich friends, but will tax all family gifts | Personal Finance | finance

We’ve known for some time that the Labor Party would raise one of the most hated taxes of all, Inheritance Tax (IHT), even if they refused to admit it during the election campaign. The left have been desperate to raise IHT for years, in their battle to reduce wealth inequality.

Finally, they have their chance. What they no longer have is the moral right to do so. Starmer and Reeves’ love of gifts from strangers has destroyed it.

As we have seen, our new Prime Minister loves a gift more than any other MP. While leader of the opposition, he pocketed nearly £83,780 in gifts and hospitality, including designer clothes and glasses and tickets to various football matches.

Many of these came from donor and fellow Labor Party member Waheed Alli, who also funded £5,000 of clothes for Starmer’s wife Victoria.

Worse still, these were not declared within the required 28 days of receipt.

And of course he paid no taxes on any of them. MPs don’t have to, for some reason.

Reeves wasn’t much better, taking £7,500 from a wealthy friend who spent it on clothes.

The hypocrisy is stunning, because at the same time they’ve been grabbing all the gifts they can, these two have been lining up a massive IHT raid on, you guessed it, gifts.

Worse, they are not directed at gifts given by wealthy benefactors, but at your own family.

Yesterday, Labor sources quietly confirmed what we all knew, that Reeves will increase IHT in his Autumn Budget on 30 October.

We don’t know exactly how he will do it, but he has a lot of options.

One would involve scrapping the £175,000 primary residence allowance, a direct attack on families who want to pass on their own home to loved ones without the Inland Revenue taking 40% of its value.

We’re not talking about random donors or mysterious friends here, but common parents or grandparents. They don’t have millions at their disposal, like Lord Alli. They simply want to pass on the little wealth they have accumulated to those they love, without thinking of political advantages.

Hilariously, Starmer and Reeves think this is wrong.

It is not the only way to attack inheritances.

It seems likely that they will attack family gifts as well. Which is more than funny, when you think about it for half a second.

Today there is a big mess of subsidies. People can gift £3,000 a year to anyone they want, with instant IHT relief. Top earners can make unlimited “surplus income gifts” as long as it doesn’t affect their standard of living.

And anyone can make IHT-free gifts as long as they live for a further seven years, known as potentially exempt transfers.

It’s a mess and needs to be tidied up. But not the way Labor will do it. And definitely not by a bunch of stingy freebies.

One idea being floated in Labor circles is to set a lifetime cap on the value of gifts people can take from loved ones of, say, £30,000. Then tax the excess at 40% (or possibly more).

Presumably this involves counting everything people receive over the decades, which bereaved families have to report to HMRC when a loved one dies.

Kind of like how Starmer had to declare those clothes for his wife. The difference is that if you somehow forget or get the sums wrong, HMRC will chase you for tax avoidance.

We’ll find out what Labor will do on October 30, but we do know one thing today. Starmer and Reeves think nothing of receiving gifts from random rich people or celebrities like Taylor Swift, but they hate the idea of ​​you getting them from your own family. Aren’t they ashamed?