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Osborne hints at rise in IHT threshold

Chancellor George Osborne says inheritance tax should only be paid “by the rich” and the Conservatives will set out proposals to increase the threshold before the general election.

In an interview with the Sunday Times, Osborne pledged to put reductions in inheritance tax at the heart of the Conservative manifesto.

He said: “I have taken steps to help with inheritance, making sure that people can pass on their pension to their children. People can pass on their Isas.

“David Cameron has made it clear, as have I, that we believe inheritance tax is a tax that should be paid by the rich and we will set out our further approach closer to the election.”

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, a move blocked by the Liberal Democrats in coalition. The newspaper says ministers believe Osborne could increase the limit to £2m.

Ukip has promised to abolish it altogether.

Osborne also hinted that a future Conservative government could limit child benefit to the first two children, and ruled out tax increases, including VAT.

He said: “I couldn’t have been clearer that our plans do not involve tax increases, including VAT, because our plans involve cutting public expenditure and saving on welfare budgets.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. “We have absolutely no plans to raise VAT” – David Cameron, 23rd April 2010

  2. No VAT rise perhaps, no income tax rises perhaps but the disreputable bunch that politicians are have just taxed us further today with the Money Guidance Levy being confirmed.

  3. £2m? £4m per couple? That’s higher than the US and that’s saying something! I used to be very antil IHT until I realised a good chunk of estates outside the southeast above the NRB were the result of Public sector pay and DB schemes. It’s not unreasonable to claw back some of which the taxpayer has underpinned.

  4. Contractually anon 12th January 2015 at 2:25 pm

    I’d prefer a lower IHT band, with the main residence being exempt. But most people would probably be glad I’m not on hand to give the treasury my IHT opinion given that I think IHT is perfectly reasonable and I never really understood the furore. The last thing I want from mine or my husbands family is their money, I want them to spend the lot. And I’d much rather provide my child with the skills to make their own way in life rather than have them relying on me to shuffle off this mortal coil.

  5. @contractuallyanon – I very much agree with you – the only thing I would add is that the Capital Taxes Office should allow the executor to use proceeds held inside the estate to settle the bill rather than having to raise executor loans or see estates in lockdown until the bill is paid from outside the estate. The catch 22 of probate not being granted until the tax is paid is a silly situation, if the bill could be paid by the proceeds of the sale of assets held inside the estate.

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