Graham Southorn shares inheritance tax tips
The Conservative Party is reportedly holding talks about abolishing inheritance tax (IHT) as part of its manifesto pledge with the hope of securing votes ahead of the next general election.
Supporters claim that the move could be a “gamechanger” for the Tories in the South of England where they are battling to defend “blue wall” constituencies.
The Times reported last week that senior figures in Downing Street have been discussing scrapping IHT as a manifesto pledge rather than a policy, providing there is a significant fall in inflation.
A source familiar with the discussions told the publication that the policy would be an “aspirational” offer. They explained: “There is a conversation about making it a values issue. Labour will attack it and say it only benefits the wealthy.
“It’s about being an aspirational country. You work hard, play hard and pass on your wealth. It’s a live discussion. Even though most people don’t pay inheritance tax it polls incredibly well. It would be a totemic offer.”
READ MORE: Tories ‘mull inheritance tax pledge in bid to win next election’
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IHT is a 40 percent tax on the value of an individual’s estate over the threshold of £325,000. The levy only affects around seven percent of estates but the Treasury raises around £7billion each year.
Another senior Government source told the publication: “Inheritance tax feels very egregious to a lot of people. It just seems very unjust.
“It is a wedge issue that it would be very hard for Labour to follow. It would also have far more impact politically than, say, cutting a couple of pence off the rate of income tax.
“One of the challenges we face is that we’ve put a lot of effort in lifting people out of tax entirely, but we’ve got very little political credit for it. It is hard to get people to vote for the party of low taxation when they’re not paying tax at all in the first place.”
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A No 10 source said: “The PM [Rishi Sunak] has repeatedly said that he wants to cut taxes for people. As Conservatives that is obvious, we want people to keep more of their own money.
“But the current economic situation means that Government is completely focused on halving inflation – to help people have more in their pockets at the end of each month. This kind of future-scoping speculation just isn’t on his mind at the moment and requires a different kind of economic environment to the one we are operating in.”
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