George Osborne’s inheritance tax proposals at the Tory party conference this week were a master stroke and worthy of consideration.
At a stroke, he delivered hope to millions of middle England households, who under the current rules could face punitive inheritance tax bills in the future, due to rampant increases in house prices and personal wealth, and a tax exempt threshold which has failed to keep pace withb this inflation.
Supporters of inheritance tax (yes, they do exist) argue that only around 37,000 estates currently pay the tax. But that misses the point. It is the effect of double digit house price inflation over much of the last decade and the increase in general household wealth which has sucked millions of estates into a potential tax liability in the future that counts.
According to research by Scottish Widows, under the current inheritance tax threshold of £300,000, almost four in 10, or 9.4 million homeowners will have an estate liable for IHT on their death.
This is because almost 4.8 million homeowners have properties worth more than £300,000 and when total household wealth is taken into account, a further 4.5 million households would be liable to pay IHT.
In fact, average household wealth stood at £269,117 in April 2007, only 11 per cent under the £300,000 threshold.
Even though the latter is set to rise to £350,000 by 2010 (assuming that Labour is still in power), this will leave many people with a problem if house prices and household wealth continue to rise.
All of which makes the proposed lifting of the threshold under Osborne’s proposals so eminently sensible, providing that his estimates of the amount of tax that can be raised from wealthy ‘non doms’ add up. But that’s another story….
Forgive me but I am a supporter of inheritance tax.
Our increasingly demanding social needs and selfish outlook on life mean that money has to be raised through the tax system to pay for the ever incresing demand to improve standards -in education, health, law and order, defence etc.
- we will not spend time teaching or even supervising our children, we will not look after our elderly relatives, support UK business if we can get anything cheaper from abroad, we certainly wil not abandon our frivolous and decadent lifestyles to save the planet from global warming, environmental destruction and dwindling natural resources.
How else can this money be raised?
IHT means you can live for today and worry about tax when you’re dead!
In our throw away, binge drinking society - isn’t this the perfect solution?
Hopefully it will also keep the lid on house price inflation - perhaps the celing ought to be £150,000
- And of course if no-one pays inheritance what will all you nice IFAs and Scottish Widows chaps do -better vorte Labour boys!!report this comment