UKIP campaign to abolish inheritance tax

Following recent media reports about the tax affairs of the United Kingdom Independence Party Leader, Nigel Farage he has responding by saying: "In 2003 a new financial advisor looked at my pension, mortgage and investments and recommended that I set up a Family Trust for my children. The reason for setting up such trusts is to avoid the complications of inheritance tax that often prove to be a burden on grieving families. At the time this was common practice, indeed several cabinet ministers and leading opposition figures have family trusts. All of this was, and still remains 100% legal.

"However, this vehicle proved to be completely unsuitable for me as I am far from wealthy enough for it to be relevant. Furthermore, I began to feel very uncomfortable about having such a trust as attitudes towards tax management changed. I decided in time to close it down, resulting in a substantial financial loss. Apart from the initial capital, no other income of any type went into the account and I have the statement to prove this. In hindsight, following advice to set up the trust was a mistake. The vehicle was unused and has now been closed for some years.

"In 2004 I decided I would play no further active part in the activities of Farage Ltd which was set up in 2003, as I was too busy with politics. My shares were transferred to the trust, but only after I had signed a dividend waiver, which I have the records for. From 2004 until 2011 I continued to act as Company Secretary for my brother without receiving any payment. When the trust was closed down the shares were given to my brother free of charge. I have always paid all of my tax and never had any intention to avoid tax.

"As I said in my last speech in the European Parliament, people only seek to avoid taxes if they feel they are unfair. Inheritance tax is an example of a tax that is certainly unfair and results in the double taxation of money. UKIP will continue to campaign for the abolition of this tax while upholding the importance of stamping out tax evasion."

For some background on inheritance tax, it was established in 1986 by Mrs Thatcher's government having been called "capital transfer tax" and "estate duty" previously. It was always seen as controversial as the threshold didn't keep up with House prices bring more and more people into the net of having to pay it.

In 2007 the Tories saw off Gordon Brown's plans for a snap general election by making a promise to raise the inheritance tax threshold to £1m. which was seen as lifting all but the richest out of the net of paying inheritance tax and saw Labour's lead in the polls wiped out. The then Shadow Chancellor George Osborne received a standing ovation at the Conservative party conference following the announcement. 

Realising the Tory pledge was popular the Labour government raised the threshold to three hundred thousand pounds, at the time of the next election the Treasury say it'll be three hundred and twenty five thousand pounds. The pledge to raise the threshold to one million pounds was in the Conservative party's 2010 manifesto but it didn't make it into the coalition agreement in 2010 following the general election.