Prime Minister David Cameron says inheritance tax should only be paid by the “very wealthy” and hinted the threshold could rise after the next election.
Speaking at an Age UK question and answer session in London yesterday, The Guardian reports Cameron said the current £650,000 threshold for couples is not high enough.
Each individual gets a £325,000 tax-free allowance on inheritance tax which is transferable between couples.
The Conservatives pledged to raise the limit to £1m in their 2010 manifesto and Ukip has promised to abolish it altogether.
Cameron said: “To me inheritance tax is a tax that should be paid by the very wealthy. I think you should be able to pass a family home on to your children rather than leave it to the taxman.
“I would like to see that go further because I think even at £650,000, particularly in some parts of the country, you see someone who has worked hard, they have put money into their house, they have done it up to improve it and they want to leave it to their children and they don’t feel that they are in any way the mega-rich, and they feel: ‘I should be able to do that without having 40 per cent of it knocked off’.
“So I do still have ambitions to do that, but even though I’m the first Lord of the Treasury, there is somebody called the second Lord of the Treasury – that’s the Chancellor of the Exchequer, so I have got to try and shoehorn these things into his budget. He is a pretty co-operative chap, but I’ve got my work cut out on this one. But he is keen on it too.”
Last month, Chancellor George Osborne abolished the 55 per cent charge on pension funds payable on death.