The Government is looking at surprising Brits with a huge tax giveaway at the upcoming Spring Budget, with plans to completely abolish inheritance tax.
Reports this morning suggest the Conservatives could go further than ever before with their proposal to abolish the hated tax entirely, rather than just reduce rates or increase the threshold.
Polls over a number of years have consistently seen Britons rank inheritance tax as their least favourite, with one pole in July this year finding 61 percent of voters say it is unfair.
Many taxpayers believe the so-called ‘death tax’ represents “double taxation”, with the deceased having already paid various taxes when earning their wealth and income in the first place.
Abolishing the tax would also prove a major dividing line between the Conservatives and Labour, with Labour unlikely to promise they would keep the tax cut in place should they win the election.
The move would also aid the Tories’ hopes of holding seats in the so-called ‘Blue Wall’ – wealthier constituencies in the Home Counties and down south where the Lib Dems are their main challengers.
The move is reportedly one of many cuts being considered by Jeremy Hunt and Rishi Sunak as a pre-election give away.
Mr Sunak has repeatedly suggested tax cuts will happen before the election as the economy improves and inflation comes down.
The Prime Minister has his hopes on inflation falling below three percent, which would allow him to meet his leadership election pledge of cutting income tax.
The Telegraph suggests this could come in the form of increasing the threshold at which people start paying the 40 percent rate, and reducing the current 20 percent rate paid between £12,571 and £50,270.
Tory MPs will no doubt welcome the reports, as the party heads into a make-or-break election year.
Much of the debate around next year’s General Election has focused around whether it will be a 1997-style landslide for Labour, or whether the Tories can replicate John Major’s surprise 1992 win despite a prolonged Labour lead in the polls.
Mr Major pulled off his surprise 1992 win largely thanks to voter concerns around whether Labour could be trusted over tax and spending.
A cut to inheritance tax was reportedly considered for the last Autumn Statement, but was put on ice in favour of tax cuts prioritising economic growth.
Instead voters were offered a large 2p cut in the rate of National Insurance, as well as significant tax cuts for businesses and the self-employed.
Tax cutting Tories have long focused their ire on Inheritance Tax as a priority for a Conservative Government.
The ‘Trussite’ group of low-tax Tories, the Conservative Growth Group that boasts over 50 MP members, has described the tax as “anti-family”.
Its co-leader Ranil Jayawardena said: “It’s not fair, it’s not Conservative and it needs to go.”
Families should be free to keep more of their money and spend it however they want. They earned it and they should keep it.
“That’s why we need to reform income tax to make it family friendly. Married couples and civil partners should have fully transferable income tax allowances, which would particularly help working-age parents with children, at often the most challenging time in a family’s finances.
“Let’s celebrate, not penalise, people who are trying to do the right thing.”
