David Cameron said he would like to ensure that only the “very wealthy” pay inheritance tax as he voiced support for raising the threshold at which the tax is paid.
The prime minister said he would like to ease pressure on people who do not regard themselves as “in any way the mega-rich” but whose estates are subject to the tax.
George Osborne transformed Tory fortunes at the party’s conference in 2007 – and spooked Gordon Brown into abandoning plans to call an early general election – with a proposal to raise the inheritance tax threshold to £1m. This would have been doubled to £2m for couples.
But the pledge was quietly dropped after the 2010 general election in the coalition negotiations as the policy appeared out of place in times of austerity. This means that inheritance tax of 40% has to be paid on estates worth more than £325,000, or £650,000 for couples.I rather doubt if many of us will be popping our clogs with £325K in the kitty. And, even then, you only pay 40% on the amount by which your estate exceeds £325K. Besides, the "very wealthy" have lawyers and accountants to enable avoidance of inheritance tax.
Finally, what about the deficit? Can we afford to reduce the tax take?