Jeremy Hunt, Chancellor, rules against inheritance tax changes Credit: Shutterstock /Neil Hall
Inheritance tax will not be cut or scrapped in Conservative Party election manifesto pressure from senior MPs, several Tory campaign insiders told The Telegraph.
Rejecting the promise of change would effectively end the year of serious deliberation within Numbers 10 and 11 about whether to act on inheritance tax.
Action has been weighed for the Autumn 2023 Statement and the Spring 2024 Budget, when instead This was the announcement of cuts to National Insurance (NI). , and also for this manifesto.
There has been significant public pressure from the Tories in recent weeks to cut inheritance tax, with some arguing it would create a simple tax dividing line with the Labor Party.
Three former Conservative Party chairmen last week called for it . The “unfair” tax will be cut, with Sir David Davis proposing to raise the threshold amount that estates pay from £1 million to £5 million.
Jeremy Hunt, the chancellor, also said in an interview just after the snap elections were called last month, the inheritance tax was “deeply anti-Conservative”.
But several Conservative campaign figures have repeatedly told The Telegraph in recent days that there will be no promises to change inheritance tax in the manifesto, which will be published on Tuesday.
Rishi Sunak and Chancellor Mr Hunt have already did it. have recently focused on cutting NI, which around 20 million people pay.
Rishi Sunak considered cutting inheritance tax but has decided against it once again. Photo: Bloomberg/Hollie Adams
The basic NI rate for staff fell from 12 per cent to 10 per cent in last year's Autumn Statement, before falling to 8 per cent in the Budget earlier this year.
At the time, Downing Street advisers said they believed cutting what they called the labor tax could have the biggest political and economic impact.
p>
Campaign officials are again considering promising another NI cut in the manifesto. They already have long-term ambitions to eliminate so-called “double taxation” of income.
More tax cuts are coming. The Telegraph reported on Friday that the Tories would promise to scrap stamp duty for first-time buyers of properties worth up to £425,000.
This will benefit approximately 200,000 families. The threshold below which first-time buyers avoid stamp duty was temporarily raised to this level back in 2022, but is set to expire in March 2025.
The move could give reform an edge
Inaction on inheritance tax would contradict some expectations. George Osborne, the former Chancellor of the Conservative Party, recently predicted that we would see major changes to inheritance tax.
It also risks giving reform an edge. The party has promised to “abolish” inheritance tax for estates worth less than £2 million.
This is a significant increase on the current inheritance tax threshold of £325,000, although there are some exemptions for family homes.
The prime minister is under pressure to deliver a manifesto-changing campaign message on Tuesday, with opinion polls unchanged and Labour well ahead in the first two weeks of the election.
One cabinet minister told The Telegraph: “We have to keep telling ourselves that our instinct is to cut taxes and the reason we couldn't do that was Covid and also Ukraine and energy prices.”
The Tories have seized on tax cuts as a key issue in the campaign, saying Labor will raise taxes by around £2,000 on every working family in its first four years in power.
Sir Keir Starmer, the Labor Party leader and other leading Labor figures have branded the claim a “lie”, questioning the assumptions made by the Tories in drawing up the estimate.
Just two weeks ago Mr Hunt, the chancellor, was facing an uphill battle. to seek re-election as an MP, has taken a critical stance on the concept of inheritance tax and its fairness.
Mr Hunt told The Telegraph at the time: “Inheritance tax was never intended for the middle class, but now it is aimed at the middle class class.”
“The very rich have 101 ways to avoid it, but middle-class people now automatically pay inheritance tax on the family home.” /> Due to property prices, inheritance taxes are affecting more and more people Photo: Bloomberg/Chris Ratcliffe
He said rising property prices meant many young people's only real hope of securing a home was inheritance, adding: “We should completely scrap inheritance tax for normal middle-class families so they don't have to worry about it.”
“Taxes should be aimed at encouraging and rewarding people who do the right thing, and being able to pass on your home to your children is the right thing to do.”
A Conservative party spokesman declined to comment on the contents of the manifesto .
Recent Comments