It isn't right that when assets pass between spouses or Civil Partners on death, decades of capital gains can be completely wiped out, tax-free. This "death reset" is a major loophole that allows huge amounts of wealth to be passed on without ever being taxed.

The proposal is simple: when assets are inherited by a surviving spouse or Civil Partners, where no Inheritance Tax is due, Capital Gains Tax must be paid on the profit made over the years, if those assets are subject to Capital Gains Tax. This treats death as the point of sale of those assets for tax purposes.

This rule would not affect the most important assets. The family home is excluded as the principal residence and would be completely safe if used jointly. The original cost of share of principal residence would be passed on as the basis for a future sale, which would be subject to Capital Gains Tax at reduced rate. Pensions would also be exempt since they are already taxed as income, so avoiding the current double taxation. This is a fair way to ensure that wealth accumulated over a lifetime contributes properly to society, yet is good for the family.