Politics · United Kingdom · 8 hrs ago
AI chatbots suggest inheritance tax changes for UK Budget
ChatGPT, Gemini and Claude proposed tax changes after being asked what Chancellor John Healey should target in the UK Budget.
They suggested extending the inheritance tax gifting window from seven years to 10, and introducing a lifetime cap on tax-free gifts.
Current rules allow gifts to be tax-free if the giver lives for seven years after making them, with no lifetime limit on gifts.
Gemini estimated its proposed changes could raise an extra £200 million to £400 million a year, while the chatbots advised keeping the 40% inheritance tax rate unchanged.
The AI tools also suggested changes to capital gains tax and property taxes, including ending a rule that limits tax on inherited assets to gains made after inheritance, and replacing stamp duty with an annual property tax.
The proposals come as Healey faces pressure to protect the UK's public finances, with economists expecting the Budget watchdog to report a sharp fall in the government's fiscal headroom.
Healey has ruled out raising capital gains tax to the level of income tax, but the sources do not say whether any of the chatbot suggestions will appear in the Budget.
AI chatbots recommended inheritance tax changes as possible measures for the UK Budget.
The advice came after The Telegraph asked ChatGPT, Gemini and Claude which taxes to target to help address a £35bn public-finance shortfall.
The tools suggested extending the inheritance tax gifting rule from seven to 10 years and introducing a lifetime gifting allowance.
They also proposed changes to capital gains tax and replacing stamp duty with an annual property tax.
All three chatbots recommended keeping the 40% inheritance tax rate unchanged.
- Who
- Chancellor John Healey was the subject of the AI advice.
- What
- ChatGPT, Gemini and Claude suggested tax changes for the Budget, including inheritance tax reforms.
- When
- The report was published on October 14, 2026; the Budget was expected that month.
- Where
- The United Kingdom.
- Why
- The Telegraph asked which taxes should be targeted to help plug a £35bn hole in public finances.
This story does not have two clearly opposing sides.
Healey ruled out increasing capital gains tax to the same level as income tax, according to reports.
The Telegraph published its report on AI chatbots’ tax recommendations for the Budget.
- Public-finance shortfall
- £35bn
- Chatbots consulted
- ChatGPT, Gemini and Claude
- Proposed gifting-rule extension
- From seven years to 10 years
- Proposed lifetime gifting allowance
- £500,000
- Estimated additional annual receipts
- £200m to £400m
- Inheritance tax rate
- 40% above the £325,000 nil-rate band
2 sources
What people are saying
loopholes
area most economists would point to because the current rules reward people who plan well
I’d hold the 40pc rate, but use the Budget to make the inheritance tax base harder to avoid and simpler to administer.
If I were preparing a tax reform briefing for the Chancellor, I would examine this closely. It would make the UK’s taxation of housing less dependent on whether someone buys or sells a home, and more dependent on the value of the property they own.