In his speech to the Conservative Party Conference, Shadow Chancellor George Osborne pledged to reduce two taxes:
1. The threshold for inheritance tax would be increased from around £300,000 to £1 million.
2. The stamp duty threshold for first time buyers would be increased from £125,000 to £250,000.
This is great news for millions of ordinary families, who will no longer have to worry about the burden of inheritance tax at a time when they are grieving over deceased relatives. It is also great news for up to a million first-time buyers.
The TaxPayers’ Alliance has been saying repeatedly that inheritance tax is unfair, unpopular and unecessary. Polls show that it is one of the most hated taxes in Britain. It is very positive that politicians are finally listening.
Unfortunately, these two tax cuts will be paid for by a flat £25,000 levy on all people who register as non-domiciled for tax purposes, meaning that the overall burden of taxation will remain the same. We hope that the Conservative Party recognises the urgent need to bring the overall tax burden down.
Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said: "It’s great news that ordinary families will no longer have to pay inheritance tax and that young couples will be exempted from stamp duty when they buy their first home. This is a victory for all those who have campaigned against the unfair inheritance tax. It’s been a long and sometimes lonely battle, but we are now starting to see genuine results."
The TPA has just been told by a high-level source that George Osborne will commit the Conservatives to abolishing inheritance tax in his speech at the Party Conference on Monday. This is great news. The TPA has long argued that inheritance tax is unfair, unpopular and unecessary and so we warmly welcome its abolition.
The plans as put forward by the Economic Competitiveness policy group and the Tax Reform Commission do envisage inheritance tax being replaced by a short-term capital gains tax, which would taper to zero after ten years and from which the main family home would be exempt. This does mean that some assets held for less than ten years will still face a tax on death, but according to the Tax Reform Commission, far less revenue would be raised under this system than from inheritance tax.
This is a huge step in the right direction and one that has our support. TPA Chief Executive Matthew Elliott said:
“Taxpayers across Britain will now look at David Cameron’s Conservatives in a different light following this announcement. Finally, voters can choose a party which will abolish this iniquitous tax. This is great news for ordinary families who suffer under the shadow of the death tax. Britain’s number one most hated tax is going to be axed.”
In a revealing interview with the Telegraph today, Shadow Chancellor George Osborne sought to distance himself from new green tax proposals put forward by the Quality of Life policy group. He said:
"We’re not going to have taxes on parking at supermarkets because I know that families going to the supermarket and doing their weekly shopping do not need to be taxed or given a car parking charge."
The paper reports that he is also preparing to abandon a proposal to issue all passengers with a "green miles" allowance, under which they would be taxed if they took more than one short-haul flight a year, saying:
"A flight tax that is a tax per plane looks like the best way forward."
If this move away from green taxes is a genuine one, George Osborne is doing exactly the right thing:
It is also very pleasing to see the Shadow Chancellor re-affirm his opposition to inheritance tax. Inheritance tax is seen as one of the most unfair taxes in Britain, as recent polls show.
The Party’s conference in Blackpool should prove to be an interesting one. We hope that it will finally abandon green tax plans and concentrate on the job of reducing the high tax burden on hard-pressed families and businesses. The TPA’s recent poll shows that 44 per cent of the electorate would like the party they support to reduce taxes, including 61 per cent of Conservative identifiers. This is compared with just 6 per cent who would like their party to increase taxes, which may happen if a 2 per cent annual growth in spending coincides with a slowdown in GDP growth.
With a possible election approaching, cutting taxes is a popular political message.