The Conservatives’ Economic Competitiveness Group has called for inheritance tax to be scrapped on primary residences as well as urging cuts to stamp duty on shares.
The heavily trailed report, to be officially published today, recommends the abolition of IHT claiming it is increasingly hitting middle-income families.
The call to axe IHT echoes last year’s proposals from the Conservatives’ Independent Tax Commission, led by Michael Forsyth.
Shadow Chancellor George Osborne has welcomed the thrust of the report which also recommends cuts in corporation tax, mortgage deregulation, an end to forced annuitisation, a lifetime savings account and the ability for the UK Government to sidestep new EU regulations.
At the launch of the report today in London, Osborne said: “Inheritance tax was originally designed to target the very rich. But these days the very rich avoid it by hiring expensive tax advisers.
It is an increasing number of ordinary homeowners who are now hit by inheritance tax and that is unfair. So I will be looking very carefully at any proposals to ease the burden of this tax on these families.”
Chancellor Alistair Darling told BBC Radio 4’s Today Programme the proposals show the Tories lurching to the right and that IHT is paid by a very small percentage of the population.
The IHT threshold is currently £300,000 and will increase to £350,000 by 2010. Currently around 6 per cent of estates are hit by the tax.