Tories Pledge To Cut UK Inheritance Tax

by Robert Lee, Tax-News.com, London

27 September 2004

The Conservative Party is currently examining ways in which thousands of households can be relieved from the Inheritance Tax burden should the party win the next general election.

Inheritance Tax is currently paid at 40% on the value of homes over £263,000. Although the Chancellor, Gordon Brown, raised the threshold in his most recent budget, it has been rapidly outpaced by strong house price inflation in recent years, pushing many families on modest incomes into the IHT net, especially in the south east.

In 1997 when the Labour Party came to power, only one town, Gerrards Cross in Buckinghamshire, had an average house price higher than the inheritance tax threshold, compared to 86 towns today, according to the Tories.

"Inheritance tax has become plain unfair. Once only the very rich paid it, but under Gordon Brown it is hitting ordinary families all over Britain,” commented Shadow Chancellor Oliver Letwin.

He added: "Two and a half million houses with six million people living in them are potentially liable to inheritance tax and the number is rising rapidly. Even former council houses are being drawn into the net. This problem needs to be remedied."

However, the Party has thus far refused to make any commitments to cutting or reforming IHT under a possible Conservative government, and Shadow Treasury Minister George Osborne remarked that it would be “irresponsible to give it now”.

“When we have done our sums then we will see what can be done. But people should be in no doubt that we want to cut taxes," Mr Osbourne assured.

Recommended