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Lib Dems plan raid on pensions tax relief to fund NHS

The Liberal Democrats have promised to cut the lifetime allowance on pensions tax relief to £1m from £1.25m and tax shares to pay for a £1bn investment in the NHS.

As Lib Dem members gather in Glasgow for their annual conference, Treasury chief secretary Danny Alexander said the party would ask for more from the “very wealthiest”.

The Daily Mail reports the lifetime allowance will be cut to £1m under the Lib Dems. It has already fallen from £1.8m to £1.25m in this parliament while the annual allowance has dropped to £40,000.

The Lib Dems would also increase dividend tax for higher rate taxpayers who have bought shares. The party would provide no further details on this proposal.

They would also end Chancellor George Osborne’s “shares for rights” employment scheme where workers can sacrifice certain employment rights in exchange for company shares.

Alexander says: “We are going to pay for [extra funding in the NHS] through additional tax measures that ask a little more of the very wealthiest in society – in particular, clawing back some of the large amounts of tax relief that go to the go to the very largest pension pots. That is a fair way to pay for this.

The proposals are very similar to Labour leader Ed Miliband’s promise to raise money from hedge funds, tobacco companies and expensive property in order to pay for a £2.5bn investment in the NHS.

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