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John Stevenson, Conservative MP for Carlisle, who led the All-Party Parliamentary Group on Inheritance Tax and Intergenerational Fairness, called for a radical overhaul of the inheritance tax system.
He said the Government should scrap the “gift with reservation” rules, saying: “Rather than look to abolish inheritance tax, the Government should be reforming it so that it is more straightforward and the rates can be reduced.
“As part of that reform they should seek to remove the gift with reservation provisions. They are overly complicated and distort the tax system with unnecessary complexity. Time for a review and reform.”
Nimesh Shah of accountancy firm Blick Rothenberg described the rules as “facetious” and said: “These examples, while ridiculous, clearly make a point that the person giving away the asset should have minimal use and enjoyment.”
The Telegraph has joined over 50 MPs in calling for the Government to scrap the death tax.
Revenue from the divisive duty has soared to more than £7bn a year as frozen thresholds dragged more grieving families into the net.
Every individual is limited to a £325,000 inheritance tax allowance called the “nil-rate band”, but this has been frozen since 2009, despite rising house prices.
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