Tories pledge £2 million inheritance tax threshold for couples

Published on Tuesday 2 September 2008 10:21

TORY proposals on the inheritance tax threshold will mean families would be able to inherit up to £2 million tax-free, it was reported today.

The Daily Telegraph said the new limit would come about because couples would be entitled to a 1 million allowance per person, transferable to the surviving partner after their death.

Labour accused the Tories of offering "tax cuts for millionaires".

Last year shadow chancellor George Osborne proposed raising the inheritance tax at the Conservative Party's annual conference.

To loud cheers and applause from the party faithful he said: "The next Conservative government will raise the inheritance tax threshold to 1 million."

The threshold for couples was later increased by Chancellor Alistair Darling from 300,000 to 600,000.

An article published in today's edition of the Telegraph claimed the Tory leadership had avoided publicising the fact the 1 million allowance would be transferable over concerns it could focus further attention on the party's economic plans.

The paper reported that a retired financial adviser, Mr Scott-Hopkins, had written to Theresa May, shadow leader of the House of Commons, asking how Tory tax plans would affect married couples.

She is said to have replied saying: "I am happy to confirm that our inheritance tax proposal will introduce a threshold of 1 million per person (not per couple).

"This means that it would be possible for a married couple to enjoy a threshold of 2 million."

The paper said 44,000 estates paid inheritance tax in 2007/08. But following several years of rising house prices, many family estates had been taken over the present 600,000 limit.

The Tory plan would mean that all but a few extremely wealthy people would be taken out of the inheritance tax system altogether, the report claimed.

Chief Secretary to the Treasury Yvette Cooper said: "When hard working families are facing real pressure, how on earth can the Tories justify more tax cuts for millionaires?

"David Cameron has clearly tried to hide this but now we know the Tories' priority is to give money to a few thousand of the wealthiest estates in the country.

"How can this be fair?"

Liberal Democrat Treasury spokesman Lord Oakeshott said: "This gives the lie to George Osborne's claims that the Tories are the party of fairness.

"When ordinary families are struggling to pay their fuel bill or keep a roof over their heads, how can it be fair to give the richest families a 2 million tax break?

"Liberal Democrats believe the priority should be a 4p cut in the basic rate of income tax to help families on low and modest incomes, not massive handouts at the top."