Tories will pledge abolition of inheritance tax

That is what the TaxPayers' Alliance is reporting on its blog.

Matthew Elliott, Chief Executive of the TPA, greeted the leaked news with excitement:

“Taxpayers across Britain will now look at David Cameron’s Conservatives in a different light following this announcement. Finally, voters can choose a party which will abolish this iniquitous tax. This is great news for ordinary families who suffer under the shadow of the death tax. Britain’s number one most hated tax is going to be axed.”

We will need to look carefully at the small print of George Osborne's announcement.  My guess is that it won't be promised immediately but will be financed from the proceeds of growth.

Comments

[Richard]

It would be more popular not to abolish it but to increase the threshold to say a million pounds. Any money saved by this adjustment could be used to increase the stamp duty of houses threshold, which would aslo be popular.

[Man in a Shed]

This is a potential election winner. That fact means that you can rely on Gordon Brown copying it.

There's almost nothing he won't do to stay in office.

[Traditional Tory]

My guess is that it won't be promised immediately but will be financed from the proceeds of growth

That's assuming there is any growth.

I would prefer to see this taken off the income tax I pay now. They can take what they like once I am dead.

[ubermoderniser]

This sends out the wrong message - that we are the party of inherited wealth.

I give this a thumbs down.

If we have to cut taxes we should cut council tax.

[Londoner]

This is excellent news but it should be "from the proceeds of growth" so I have no problem if it is qualified in that way. Within a Parliament with normal growth this is easily achievable as even now it raises peanuts. We should couple this with the equal priorities (also from the proceeds of growth) of cutting income tax for the poorest taxpayers and cutting tax affecting pensions (stamp duty on shares) and house buying costs (stamp duty on property). We should also allow anyone over the age of 70 to defer 50% of their Council Tax bill until they either dispose of the property or die. As a package like that, it will indeed be a popular, but still fully practical, tax platform (if not, in itself, the magic election winning bullet).

But, let's not be mealy mouthed - rejoice, rejoice!!!

[Londoner]

"They can take what they like once I am dead."

Traditional Tory - NOT. It's lucky the Trade Descriptions Act does not apply to handles used on this site.

[John Leonard]

It's a good start.....

[HF]

This appeals to less than 5% of voters.

Madness.

[Cleo]

I do not get the obession with inheritance tax. Any changes to taxation should be the reform of council tax which will help far more people.

[idiot alert]

5 % of voters per year - not in their lifetime you muppet.

[Colin Smith]

Long overdue and outstanding news if true.

A strapped on election winner in many marginal Southern seats in particular at relatively very low cost.

(Our version of Northern Rock perhaps ?)

[Yet Another Anon]

Hints of this, hints of that - nothing concrete. The Conservatives in government in the 1980s and 1990s were committed to moving towards abolition of IHT and never did and at the moment all George Osborne has said is that reform would be a possibility.

[Cllr Francis Lankester]

I too hope this is not true: 5-7% of people only pay this tax. It smells of rewarding the rich elite of which our party's leadership is generally made up. Can't they see this?

[Yet Another Anon]

"Plans to overhaul Inheritance Tax" could mean something very different from outright abolition - it could turn out to be a new tax or simply higher thresholds and a few more exemptions.

If there was to be a tax, it would surely be better to put in on money inherited rather than on the Estate - someone in line to inherit from a very large estate could be getting very little and be very poor, equally from an Estate that was below threashold - an inheritor could be getting quite a bit and could be very rich themselves. It is a perverse tax, and the argument is about really whether it should scrapped or be replaced with something else more modest in scope and perhaps being really about money inherited rather than what is basically an Estate Tax (for example everyone could have a threshold for money they inherit in a year and above this it could be counted as taxable income).

[dog biter]

Abolition of IHT? I'll believe it when I see it. Back in early 1990s John Major was telling activists that he planned to abolish capital gains tax. But of course he never did. I'm afraid that if the Conservatives are to regain any respect among the Tory faithful, and indeed Middle England generally, they are going to have to come up with promises, not a lot of gossipy flam. At the moment Osbourne and crew are coming over like a bunch of amateurs compared to the measured, statesmanlike delivery of Brown, great liar though he may be.

[middle England]

I hope that this rumour is mistaken.

If we are meritocrats we should be wary of allowing all the benefits of one family generation to flow to the next generation. This is likely to entrench class divisions.

Total abolition will be seen as a massive benefit for "Tory toffs".

We should take middle Britain out of the tax by doubling the threshold, not proposing abolition which will benefit the landed gentry massively.

Major mistake if this goes ahead.

[John Leonard]

I see the socialist wing of the party are out in force tonight.

[David Cooper]

A sensible and practical way to appeal to the thousands of ordinary middle class Stay At Home Party members who once turned out to vote for us in their thousands and now want to see a clear sign that doing so will make a difference. Bring it on, unequivocally and unconditionally.

[Cleo]

Channel 4 news is reporting a poll out tomorrow with a 11% Labour lead. Don't see how inheritance tax abolition is going to change that.

[Editor]

I'll have more on that poll at 9.45pm, Cleo. Please return then!

[olivepeel]

IHT matters to most people in London and the South where any election matters.
More important than council tax or indeed stamp duty or allowance reform imo.

[Will]

Not keen on this at all. Can we have a tax cut that will benefit the majority not the children of the richest 5-7% ?

How are we paying for this ? - Green taxes?

[cherie79]

Either raise the limit to at least £500,000 and keep it in line with house prices or take the main family home out of the tax altogether up to that value. It is not our fault that house prices have gone through the roof and we never expected to come anywhere near the inheritance tax level. We worked hard for our house and want it to go to our son so his children will be able to grow up in a house he could never afford now, is that so unreasonable? We were never rich, just middle income people who were lucky enough to buy when prices were more reasonable. In fact we both came from council houses and, thanks to free university education prospered, we paid tax all our lives, paid into private pension as we did not work for the State and we have never taken any benefits. Come to think of it we are exactly the 'hard working' people Mr. Brown extols so much and our reward is to be robbed agin when we die! go for it Mr. Cameron it secures our vote.

[The Culture Warrior]

"This sends out the wrong message - that we are the party of inherited wealth.

I give this a thumbs down.

If we have to cut taxes we should cut council tax."

I second that. I hope, at some point, we can do away with inheritance tax - but it should absolutely not be our first priority. It's really quite timid, skirting around the real issues of corporation, income and council tax.

[Radical Tory]

Abolishing this tax is good, but those who have say 2 million plus like Osborne etc should still pay some tax. To do otherwise would open up ourselves to much criticism. If we want to focus on tax let's focus on taking all those on the min wage out of paying tax on their income. Let's help the strivers, not people who just put their money abroad so they don't have to pay inheritance tax i.e. James Goldsmith.

Come on Dave and George - don't let Labour portray you as toffs just out to help fellow toffs. Don't walk into Brown's trap for once.

[Richard Carey]

If we want to focus on tax let's focus on taking all those on the min wage out of paying tax on their income. Let's help the strivers, not people who just put their money abroad

For once, "Radical Tory", we find ourselves in broad agreement! We need to focus reform of the tax system first and foremost on the needs of the poorest in society. Inheritance tax may be unfair double taxation, but reforming it should not take priority above helping those who can only dream of accumulating that level of assets in the first place.

[Richard]

How many people pay IHT in marginal seats in the midlands, north and Wales?

If we want to use tax cuts to attract votes then we need to target them better.

I would prefer income tax cuts at basic rate or raising the 40% band threshold before IHT cuts. It would be better for the economy and we should be encouraging people to become richer by creating new wealth rather than by inheriting old wealth.

[Malcolm Dunn]

Inheritance tax is being paid by a larger percentage of people than ever before. It used to be paid only be the very wealthy but now anyone who dies owning an average London house will have to pay it.
Also the very wealthy rarely pay it as they are able to employ tax advisors who will ensure that this tax can be avoided which I suppose rather ruins your argument Radical Tory (as usual).
For someone who supposedly prefers to stick to the issues and supposedly dislikes personal attacks your constant personal attacks on Cameron and Osborne add absolutely nothing to the debate. No wonder you prefer to remain anonymous like the majority of your fellow whingers.

[Mike A]

If I had £4bn spare, I'd certainly spend it educing the tax on people who'd just inherited £300k.

That's obviously the best thing for it.

[LW]

I had always though inheritance tax should be overhauled- but I'm no longer sure it should be such a priority. Yes, in the long run! of course! But now we need to reafirm our position with tax in general, with the NHS, with education and with other issues much closer to voters hearts.

[Observer]

I too hope this is not true: 5-7% of people only pay this tax. It smells of rewarding the rich elite of which our party's leadership is generally made up. Can't they see this?

Posted by: Cllr Francis Lankester | September 28, 2007 at 19:32

Thank you Councillor...as one who has now to navigate this nightmare after events of the past week I find your comments about rich elite somewhat smug and condescending but you no doubt work on the principle that What's Mine is Yours and what's Yours is Yours.

I believe I can reduce my IHT problems by a contribution to your political rivals.....if you think a starting band of tax at 40% is so wonderful why not make it the basic rate of Income Tax and VAT ?

[Obsever]

If I had £4bn spare, I'd certainly spend it educing the tax on people who'd just inherited £300k.

That's obviously the best thing for it.

Posted by: Mike A | September 29, 2007 at 00:22

Far better to impose ZERO tax on Gambling Winnings and tax Saved Income and Investments at 40%.

It symbolises British Values - Gambling pays no tax on winnings but Savings must be expropriated

[Patriot]

My instinct is that providing this turns out to be a firm committment it will be a positive vote winner. Promises only to "review it" will be seen as weasel words selected so that it can be kicked into touch once elected and could work against us.

Labour will certainly claim that this will benefit the super rich front bench - so raising the limit (£800k? £1M? What would the limit be if it had kept pace with house price inflation?) rather than cancelling it altogether might be prudent.

If we want to look at the impact forensically then a discussion with Experian about how Mosaic would view the effect would probably be helpful if we haven't done this already. (Labour are already using Mosaic to fine tune their own targetting.

[ceidwadwyr]

Did you have a nice time in Bournemouth Radical 'Tory' ?

[EML]

This is news? We all know it's one of the top three or four taxes due for reform my Conservatives.