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Cameron Hints At UK Inheritance Tax Cut Ahead Of Elections

by Jason Gorringe, Tax-News.com, London

17 October 2014


UK Prime Minister David Cameron has again raised the prospect of increasing the UK's inheritance tax threshold to GBP1m (USD1.6m) ahead of another upcoming general election.

The measure was last proposed ahead of the last general election with another now scheduled for early next year, by no later than May 7, 2015. Although the proposals won the Conservative Party support during the last general election, the plans were later dropped when the Conservatives formed a coalition with the minority Liberal Democrats party.

Under Cameron's plans, the threshold would be lifted from the current threshold of GBP350,000 for individuals and GBP700,000 for couples. A 40 percent tax rate applies above these thresholds.

Paul Green, Director of Communications at Saga, a pensions and insurance provider, opined that the plans are likely to garner fairly broad support for the Conservatives from the electorate: "There are many parts of the country where just owning a relatively modest home puts you in the frame for paying inheritance tax. Whilst the rich can pay for their affairs to be carefully managed, enabling them to swerve the levy, it's the affluent middle class that end up being clobbered by an inheritance tax threshold that has simply failed to keep up with house prices increases."

"This move will not only be welcomed by older homeowners who want to pass on an inheritance, but also to their children, grandchildren and loved ones who stand to directly benefit from the change."

TAGS: individuals | inheritance tax | tax | pensions | insurance | United Kingdom | Communications

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