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Industry slams proposal to scrap IHT

Conservative proposals to scrap inheritance tax on primary residences have been branded an unrealistic vote-grabbing exercise that would drive up tax elsewhere.

Aegon technical manager Margaret Jago says IHT raises £3.7bn a year which the Government would have to replace by increasing other taxes or cutting back on expenditure.

She says the proposal plays to hatred of the tax in Middle England and that raising the IHT threshold in line with house price inflation would be a better alternative.

Skandia head of tax and financial planning Colin Jelley says: “How would any Government afford to abolish it? Given the current rate of spending, they would have to tax it from somewhere else. IHT does affect a huge number of people but there are ways to mitigate it. This is a huge opportunity for financial advisers.”

Worldwide Financial Planning IFA Nick McBreen says: “This is absolute nonsense. How would anyone in their right mind think that a system generating £3.7bn of tax and rising could be scrapped? This is a vote-gathering exercise if ever I have seen one. They have not got a clue what they are talking about.”

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