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Lib Dems plan tax raid on pensions and property

The Liberal Democrats are planning to raid pensions tax relief and expensive property as the party seeks to differentiate itself from the Conservatives ahead of the next general election.

The Independent reports the next Lib Dem manifesto will pledge to cut the lifetime pensions tax relief allowance from £1.25m to £1m, raising up to £2bn a year.

The lifetime allowance is £1.5m today but will drop to £1.25m in April. Last year’s party conference backed further reductions to £1m.

The party is also proposing its long-term policy of a mansion tax to introduce new bands and charges on properties worth more than £2m and more than £5m.

The measure, expected to raise a further £2bn, was almost introduced in the 2012 Budget but was vetoed at the last moment by Prime Minister David Cameron.

In a leaked document at its party conference last year, the Lib Dems said people earning £50,000 a year were “rich” and the party has consistently pushed for new wealth taxes.

A Lib Dem source told the Independent: “We have always been clear that those with the broadest shoulders should bear the greatest burden.”

At the weekend, Shadow Chancellor Ed Balls promised to re-introduce the 50p income tax rate on salaries over £150,000 after it was cut to 45p last April.

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