RE: The facts27 Aug 2024 18:03
Money," she said, adding that she hoped the party would continue to work "in partnership" with business.
3. Reduce pension tax relief
When people or their employers pay into private pension pots,, external they receive tax relief on these contributions, up to set limits.
The relief allows some of a person's earnings that may have been taken by government in tax to go into their savings for retirement instead.
Under the current system, savers receive tax relief at the same rate as their income tax - meaning basic rate taxpayers receive relief at 20% and higher rate taxpayers at 40% or 45%.
In the run-up to big political events like the Budget, Tom Selby, director of public policy at AJ Bell, says that there is often speculation that a flat rate of pension tax relief could be introduced.
This would mean the system is less generous for higher earners, but the IFS has suggested this could raise "billions" for the government.
Some opponents have said, however, this could dissuade people from saving for the future and might be difficult to implement.
4. Raise inheritance tax
Inheritance tax, currently paid at a rate of 40%, is charged on the part of a deceased person's estate above a threshold of £325,000.
But it only applies to fewer than one in 20 estates.
No tax is paid if the estate is valued at less than £325,000, or if anything above this threshold is left to a husband or wife, civil partner, charity, or a community amateur sports club.
And if a home is part of the estate and a person's children and grandchildren stand to inherit it, the threshold can go up to £500,000.
Ms Reeves could raise the rate of inheritance tax, or curb the relief available on certain inherited assets.
These include agricultural land and pension savings, which can both be inherited tax-free.
There are also allowances for unquoted shares, which are shares in a business not listed on the stock exchange.
James Smith of the Resolution Foundation believes inheritance tax should be reformed because there are "all sorts of reliefs within the system that allow you to move your assets in a way that allows you to avoid paying inheritance tax".
However, Paul Johnson from the IFS says Ms Reeves will have to go further than simply curbing allowances, saying: "You won't raise a lot by doing that - maybe a billion or two."
Calls to cut or abolish inheritance tax come often as the tax is so unpopular, the Resolution Foundation says, external.
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