LONDON: David Cameron has announced a radical plan to cut inheritance tax, with a landmark election promise to protect millions of family homes from the “death duty”, reported Daily Telegraph.
The Prime Minister is setting out reforms which will mean parents and grandparents can leave their homes and other assets worth up to £1 million entirely tax-free to younger generations.
At present, an estate worth £1 million is liable for an inheritance tax bill of £140,000.
The plan, which would take effect in 2017, honours a long-standing Conservative promise to cut inheritance tax, which Tories say has been blocked by the Liberal Democrats in Coalition.
Mr Cameron and the Chancellor, George Osborne, hope that the eye-catching pledge to keep the family home out of the taxman’s grasp will capture the public imagination over the next three-and-a-half weeks to Polling Day.
The plan will be paid for by imposing higher taxes on pension savings of people earning more than £150,000 a year.
In a speech on Sunday, the Prime Minister will say that the desire to “pass something on” to younger generations “is about the most basic, human and natural instinct there is”.
“We will take the family home out of inheritance tax,” he will say. “That home that you have worked and saved for belongs to you and your family – you should be able to pass it onto your children and with the Conservatives, the tax man will not get his hands on it.”
The policy was announced as all the major parties prepared to publish their election manifestos this week. In other campaign developments with 25 days left before the polls open on May 7:
- An exclusive Telegraph/ICM Wisdom Index poll predicted that Labour and the Conservatives would win almost exactly the same share of the vote in the election, putting the Tories on 31.8 per cent and Labour on 31.7 per cent.
- The Tories have overtaken Labour as the party seen as most likely to help families with everyday living costs, as well as more trusted to run Britain’s economy responsibly, the ICM survey found.
- In an interview with The Telegraph, Nigel Farage, leader of the UK Independence Party, announced he would be fielding candidates in 625 out of 650 parliamentary constituencies, with more than 5,000 council candidates standing for election next month
- Elizabeth Truss, the Environment Secretary, promised a new Tory government would “turbo charge” the rural economy, with a new government unit to encourage more people to buy British, and a plan to triple the number of British-made foods given protected status by the European Union.
The Conservative announcement on inheritance tax will please the party’s grassroots and traditionalists who have been calling for such a reform since Mr Osborne announced that he wanted to cut inheritance tax before the last election.
Britain has some of the highest death duties of any country, and it has been estimated that more than a third of home owners face the threat of inheritance tax bills because of rising house prices.
