Cameron And Osborne Pledge Fightback Tax Cuts

by Jason Gorringe, Tax-News.com, London

02 October 2007

As Tory Party leader, David Cameron engaged in fighting talk at the weekend, urging Prime Minister Gordon Brown to call a snap election, Shadow Chancellor, George Osborne pledged to slash inheritance tax (IHT) and stamp duty.

Delivering a speech at the party conference in Blackpool, Mr Osborne announced that a Conservative government would raise the IHT threshold to GBP1 million and stamp duty to GBP250,000, in what he described as "the most important reform of capital taxes for a generation".

He outlined his plans to pay for these cuts with a GBP25,000 levy on those who register for non-domicile status.

Explaining the reasoning behind the Conservative Party's newly announced propose tax on 'non-doms', he announced that:

"There are currently a number of people living in Britain who register for non-domiciled tax status offshore. It is a good thing for Britain that they live here and bring their talent and their investment to our economy. I make this promise: I am not going to tax all that income as Gordon Brown has persistently threatened to do. But in return for that promise and the certainty it brings, we will charge a flat annual levy of around GBP25,000 for those who register for non-domicile status."

"It is easy to administer, difficult to avoid and strikes the right balance between a fair tax system and a competitive economy. Introducing this offshore levy covers the cost of abolishing stamp duty for 9 out of 10 first time buyers. And it also enables me to make one further commitment to help those families striving for a better life."

With regard to the proposed increase in the inheritance tax threshold, Mr Osborne explained that:

"That means we will take the family home out of inheritance tax. In a Conservative Britain, nine million families will benefit. In a Conservative Britain, only millionaires will pay death duties. In a Conservative Britain, you will not be punished for working hard and saving hard. You will not be penalised for wanting a better life for your children. Taken together our measures on stamp duty and inheritance tax represent the most important reform of capital taxes for a generation."

Commenting, meanwhile, on the planned abolition of stamp duty for first home buyers spending less than GBP250,000, the Shadow Chancellor stated that:

"We will take 200,000 people a year out of stamp duty altogether; that's one million people over a Parliament; And our message to the family working long hours, saving every spare pound to afford their first home is this: Your dream is our dream too. Your aspiration is our aspiration. We will get you out of tax and into your home."

According to Conservative costing estimates, raising the IHT threshold will cost GBP3,100 million, and raising the stamp duty threshold to GBP250,000 for first time buyers will cost GBP400 million. However, this is expected to be offset by additional revenue from the Offshore Domicile Levy of GBP3,500 million.

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