Shadow Chancellor, George Osborne, today confirmed that Inheritance Tax (IHT) will be one of the first targets for reform under the next Conservative government. Writing in the Mail on Sunday, George said:
“Want to help people who work hard, save throughout their lives and want to leave something for their children? Then take the family home out of inheritance tax altogether…
“Inheritance tax was designed to target the very rich but these days they are able to avoid paying it altogether by hiring expensive advisers.
“Increasingly, it is ordinary homeowners who now find they are paying inheritance tax and the reason for this is simple. During the past ten years, Gordon Brown deliberately made sure that the rise in the threshold at which you start paying the tax did not keep pace with house prices.
“It is a classic stealth tax which is buried in the small print, of the kind we have come to expect from him.
“The result is that the number of people paying inheritance tax has doubled and Scottish Widows recently calculated that up to four in ten households could soon be liable for it.”
George is absolutely right; Gordon Brown’s unremitting use of the cynical device of “fiscal drag” means that increasing numbers of people of moderate means are being caught in the IHT net. And it is not only the IHT threshold that has been kept deliberately low; the annual gift exemption of £3,000 has remained unchanged since Labour took power in 1997.
I know from speaking to people throughout Clwyd West that IHT is one of the most loathed of all taxes; it is a charge on assets that, more often than not, have been built up through a lifetime’s savings from income on which tax has already been paid. It diminishes the ability of people to leave their assets to their families, friends, the dogs’ home, or to whomever they wish. It is the ultimate exit charge.
Exempting people’s homes from IHT will go a long way toward reducing the impact of this unfair tax and George’s announcement will be greatly welcomed by millions of people up and down the country.
Predictably, Labour are already crying foul; they obviously fear the electoral attractiveness of such a policy. Alistair Darling, Chancellor in name, but in practice emasculated by Gordon’s last budget, which made policy commitments for the next three years, lamely called the announcement “a lurch to the right”.
It is actually nothing of the sort; it is an approach that will offer increasing numbers of ordinary people the opportunity to dispose of their hard-earned assets in the way that they, not the government, see fit. It will keep more money in the economy and will, therefore, generate more wealth for our country. It will, in short, give people more freedom.
And that will be a very good thing indeed.
“Want to help people who work hard, save throughout their lives and want to leave something for their children? Then take the family home out of inheritance tax altogether…
“Inheritance tax was designed to target the very rich but these days they are able to avoid paying it altogether by hiring expensive advisers.
“Increasingly, it is ordinary homeowners who now find they are paying inheritance tax and the reason for this is simple. During the past ten years, Gordon Brown deliberately made sure that the rise in the threshold at which you start paying the tax did not keep pace with house prices.
“It is a classic stealth tax which is buried in the small print, of the kind we have come to expect from him.
“The result is that the number of people paying inheritance tax has doubled and Scottish Widows recently calculated that up to four in ten households could soon be liable for it.”
George is absolutely right; Gordon Brown’s unremitting use of the cynical device of “fiscal drag” means that increasing numbers of people of moderate means are being caught in the IHT net. And it is not only the IHT threshold that has been kept deliberately low; the annual gift exemption of £3,000 has remained unchanged since Labour took power in 1997.
I know from speaking to people throughout Clwyd West that IHT is one of the most loathed of all taxes; it is a charge on assets that, more often than not, have been built up through a lifetime’s savings from income on which tax has already been paid. It diminishes the ability of people to leave their assets to their families, friends, the dogs’ home, or to whomever they wish. It is the ultimate exit charge.
Exempting people’s homes from IHT will go a long way toward reducing the impact of this unfair tax and George’s announcement will be greatly welcomed by millions of people up and down the country.
Predictably, Labour are already crying foul; they obviously fear the electoral attractiveness of such a policy. Alistair Darling, Chancellor in name, but in practice emasculated by Gordon’s last budget, which made policy commitments for the next three years, lamely called the announcement “a lurch to the right”.
It is actually nothing of the sort; it is an approach that will offer increasing numbers of ordinary people the opportunity to dispose of their hard-earned assets in the way that they, not the government, see fit. It will keep more money in the economy and will, therefore, generate more wealth for our country. It will, in short, give people more freedom.
And that will be a very good thing indeed.
2 comments:
This is great stuff. Inheritance Tax is destructive. I have been accused by Mark Tami, alongside you, of being a Tory 'right-winger' - The reason being my enthusiasm for much that was in the Redwood/Wolfson Report. Its not often I am so accused - and am rather proud of this new description.
Yes, it's good to know I am in such company, Glyn!
Mind you, I repeat my regret at having caused Mr Tami such affront.
Post a Comment