Conservatives leader David Cameron has been urged to scrap inheritance tax by the party's Economic Competitiveness Policy Group.
The report claimed: “Inheritance tax is not a popular tax. This has become even more true as the swift rise of house prices in much of the country has resulted in many people, who could not in any sense be described as rich, suddenly finding that their family will be liable to pay quite substantial amounts upon their estate. We recommend the abolition of inheritance tax.”
Under the proposals estates would be liable for capital gains tax rather than inheritance tax but first homes and assets held over 10 years would be exempt. The report said: “The present Government’s introduction of taper relief was a complicated but welcome way of reducing the impact of this tax on enterprise and business formation. We would adapt this system to reduce the adverse impact of capital taxation on saving. We agree with the Forsyth Report that capital gains tax should not apply to any asset held for more than ten years, and agree that taper relief should apply to all chargeable assets. An asset held for nine years would attract 10% of the charge; and one held for five years, 50% of the charge. A person’s home would remain exempt. In addition we agree that estates on death should also pay new capital gains tax, taking all assets held for more than ten years before death, and the primary residence, out of tax.”
The Shadow Cabinet is yet to decide which, if any, of the proposals will form part of the Conservative Party manifesto.
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