Why UK chancellor should avoid inheritance tax sugar rush in budget | Arun Advani

Slashing the headline rate may offer short-term gains, but the responsible route may be better bet for Jeremy Hunt

Since the summer, there have been rumours that the government is looking to cut inheritance tax. The prospect of an early election has only heightened speculation that this is coming in the March budget. While commentators and pundits argue over the question of whether or not a cut is coming, they miss the more important question: how would an inheritance tax cut be made?

When he stands up on 6 March, Jeremy Hunt will have two options for how he could make such a cut. The first, reported to be popular on the right of the party, is simply to cut the headline rate.

Arun Advani is an associate professor of economics at the University of Warwick and a research fellow at the Institute for Fiscal Studies.