TaxPersonal TaxTories to scrap inheritance tax on family homes under £1m

Tories to scrap inheritance tax on family homes under £1m

Current £325,000 threshold puts 'quarter of homes at risk' of attracting inheritance tax, PM claims

Tories to scrap inheritance tax on family homes under £1m

FAMILY HOMES worth up to £1m are to be taken out of inheritance tax under Conservative plans.

The current inheritance tax threshold is £325,000, putting “a quarter of houses at risk”, according to the prime minister.

On Sunday (12 April), David Cameron said: “The policy is clear, the family home is yours. You have worked hard for it, you have saved, you have put in the effort, you have put in the hours.

“You have paid tax on the income, you paid tax when you bought the house, you shouldn’t have to pay tax when you die and want to pass that house onto your children and grandchildren.”

The Institute for Fiscal Studies, however, was critical of the move, noting “this (and in fact any) IHT cut will also go disproportionately to those towards the top of the income distribution”.

Director Paul Johnson added the debate from all parties around tax in the election campaign had been “deeply depressing”.

He told the BBC: “You’ve had the main parties ruling out whole hosts of relatively straightforward ways of increasing tax, talking about raising tax from some other group, be they are the rich or the non-doms or the tax avoiders, but this is all real money and has real effects on the economy – and no sense from anybody about a serious way forward for the tax system.”

Labour and the Liberal Democrats were also scathing of the proposals, which were dropped by the Conservatives as part of the 2010 coalition deal.

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