MUCH has been aired recently about the inequality of wealth and its preservation. Unlike America, UK society seems to be beset with envy: envy of enrepreneurship, envy of success, envy of wealth and of high income generation, envy of inherited funds - why?

In part it is tied up with issues over taxation which is often conflated without distinction between that of avoidance (legal) and evasion (illegal).

As Bengamin Franklin remarked ‘nothing can be certain in life except death and taxes’ — we can’t do much about death but we can affect the tax we pay and rightly we do.

Many engage in legal avoidance: through personal allowances, contributions to pension funds, gift aiding, investments in ISAS and trusts. Also illegally through the so called black economy.

What goes for individuals also applies to companies. Their main objective should be to maximise the return for the owners or shareholders. In so doing they provide the essential growth in private invested pension funds (not public/state which are an unfunded charge on the Exchequer). These funds will become the main sources of retirement income.

Most of us therefore have an overriding interest in allowing the greatest level of enhancement and retention of financial resources to finance economic growth and to provide a reasonable life in retirement.

It is invidious therefore that having paid our legal taxes during a working life, that in death we (or more precisely our offspring)  can then suffer another charge on wealth passed on as inheritance. Such resources are effectively double taxed — no wonder therefore we strive to pass on wealth before St Peter comes to call.

The situation will become more serious for many as the inflation of asset values continues to outstrip the Government’s reluctant willingness to raise allowances.

Could there be any better argument for the total abolition of Inheritance Tax?

Colin Sansom

Tavistock