Inheritance tax hike looms as Andy Burnham allies plot raids to hammer 'the rich'

Published: 22:02, 11 July 2026 | Updated: 22:19, 11 July 2026 Grieving relatives could be hit with a sharp rise in inheritance tax as part of a package of wealth taxes being considered by Andy Burnham. Allies of Mr Burnham, who will walk through the doors of No 10 in just over a week's time, are understood to be studying a raft of proposals, which would hammer the rich – and hammer them again if they try to leave the country as a result. Media outlets were briefed this weekend that Mr Burnham was considering tax cuts for low earners after entering Downing Street in order to start his premiership with a 'message of hope'. Other options to reduce the cost of living include lower energy bills and bus fares. But with the Government facing spiralling bills for welfare, defence and other public spending commitments such as the nationalisation of water companies, extra money will have to be found from somewhere. Mr Burnham has fuelled speculation by saying that there was 'some room' in Labour's manifesto – which ruled out rises in National Insurance, the basic, higher, or additional rates of income tax, or VAT – for some 'movement on tax'. Some of the potential tax options were endorsed by the Labour-linked Institute for Public Policy Research in 2024, as part of a Commission on Health on which Mr Burnham sat. After citing links between poor health and inequalities of income, the report suggested raising money for initiatives such as subsidising healthy foods by increasing inheritance tax – which is payable on the amount by which estates exceed £325,000 – from 40 to 50 per cent, to raise £1.9 billion per year. Advisers to Mr Burnham have also suggested replacing income tax, capital gains tax, inheritance tax and National Insurance contributions, with a single levy, with these 'national contributions' to be paid on all income, regardless of whether they were from work, the sale of assets or from a late relative's estate. Andy Burnham, MP for Makerfield, arrives for a radio interview on LBC's 'Tonight with Andrew Marr' on July 2 Former Labour leader Neil Kinnock speaks at Parliament Square, London, on June 20 In addition, higher taxes on smoking, drinking, processed foods and gambling could raise more than £10 billion. Last week, The Mail on Sunday revealed that the Prime Minister-in-waiting could lower the mansion tax levy from homes worth £2 million to properties valued at £1.5 million, making an extra 150,000 families liable for four-figure tax bills. City executives are making contingency plans for the introduction of a super-rich tax which would impose a 2 per cent annual levy on assets valued above £10 million, coupled with an 'exit tax' on anyone emigrating to escape the punitive new regimes. They were spooked by a call last year from former Labour leader Neil Kinnock for an annual 2 per cent tax on assets valued above £10 million, which he said would bring in up to £11 billion a year. The idea is modelled on the wealth tax which applied in France until 2018. The Impôt de Solidarité sur la Fortune (ISF) was an annual progressive tax, with rates from 0.5 per cent to 1.5 per cent, which was triggered when a French citizen's net personal wealth was greater than €1.3 million. Introduced in 1982 by Leftist President Francois Mitterrand, it was abolished by President Emmanuel Macron because of the number of millionaires he said it had driven out of the country – 60,000 between 2000 and 2017, a total capital flight between 1988 and 2007 of €200 billion and an annual drag on GDP growth of 0.2 per cent. Financiers fear that a Burnham Government would address the argument about capital flight by imposing an exit tax on anyone trying to flee to a country with lower taxes by charging 20 per cent on their business assets – such as shares in private companies – if they wanted to emigrate. In addition, although the manifesto Mr Burnham is inheriting rules out rises in income tax, as recently as 2025 he said that there was 'definitely a case' to reintroduce the 50p income tax rate. France's President Emmanuel Macron wearing sunglasses outside the Elysee Presidential Palace Conservative Party Chairman and MP for Thirsk and Malton, Kevin Hollinrake pictured on July 3 MP Kevin Hollinrake, chairman of the Conservative Party, said: 'The cost of Burnham is rising by the day as he looks to appease Labour backbenchers and pay for even more welfare spending.  Not content with already hitting farmers and family businesses with increases to inheritance tax, he is now planning a further raid. That will punish people who work hard, save responsibly and want to pass something on to the next generation. 'Instead of raising taxes again, he should be reforming welfare so we can free up more money to defend our country.' A source close to Mr Burnham said: 'We will not be doing anything on inheritance tax in the July package of measures.'