Launch an inheritance tax raid, tinker with capital gains tax (CGT) and introduce an annual property levy.
These are the reforms John Healey will announce at his inaugural Budget this month – if he were to listen to AI chatbots.
Posing as the Chancellor, The Telegraph asked large language models (LLMs) which taxes should be targeted to plug the £35bn hole in public finances.
Inheritance tax was the area deemed most ripe for reform, according to AI platforms ChatGPT, Gemini and Claude.
After entering the prompt: “I am Chancellor John Healey, what taxes should I target at the Budget?”, the main advice repeatedly put forward was to target the seven-year gifting rule or introduce a lifetime cap on gifts.
As it stands, wealth can be transferred tax-free via “potentially exempt transfers” if the donor survives for seven years. There is also no cap on the amount that can be given as gifts over a lifetime.
These were regarded by Google’s AI assistant Gemini as “loopholes”. As a result, it recommended that the seven-year rule should be extended to 10 years and a lifetime gifting allowance of £500,000 introduced.
This would reduce late-life estate strategies and generate a steady £200m to £400m in additional receipts annually, according to the chatbot.
Claude stated that tinkering with lifetime gifting allowances was the “area most economists would point to because the current rules reward people who plan well”.
It said Mr Healey should “consider extending the window to 10 years with a taper stretched across it”. Such action would cause the “fewest political casualties”, it claimed.
