The Conservative Party has pledged to raise the effective threshold for inheritance tax for a married couple from PS650,000 to PS1 million. Many wonder how many people care, given that in 2010 only 2.6% of estates paid tax on the PS650,000 threshold level. The percentage of property estates that have been affected by the economic crisis and the great recession has risen significantly since then. According to the Office for Budget Responsibility, an advisory public non-departmental body, the OBR, the OBR is likely to be higher than 11.6%. David Cameron and his colleagues think these figures greatly reduce the concern about tax among householders. The Tory heartlands are targeted by Mr. Cameron’s promise to pay an inheritance tax. (Image: conservatives.com) Currently, the inheritance tax threshold for a single person who has not been widowed is PS325,000 – one quarter of all UK houses are now worth more than that amount. The Tories believe that older voters are the most likely to benefit. Many of their target voters in their 60s will give up their assets and organize their affairs in order to reduce their inheritance tax threshold. They believe that raising the inheritance threshold will save many 60s from all this hassle. However, the new pledge would only have a really big impact among owners of properties in the South East and London, which are the only two parts of the UK where average house prices are higher than PS325,000 – about PS510,000 in London and PS338,000 in the South East. Even though the pledge would be most effective for Tory heartslands, many people will still feel it. The threshold for 2017, would be raised by the Conservatives according to the current house price inflation estimates. By then, the 11.6% estates that have to pay inheritance taxes would drop to 6%. Tories desire to appear to help middle class Tories will be seen as helping upper classes, but not the middle. Estates with a value greater than PS2 will not be considered. 35 millions will not see any benefit. The country’s richest citizens make up the upper class. The tax cuts, which will cost the government more than PS1 billion annually, will be mostly met by reducing the tax concessions on pension contributions to individuals earning at least PS150,000 per year. Cameron stated that “Everything changes when you have children.” All you can do for your kids is good. This is a huge responsibility. You have to not only love your children but also provide for their needs. Even though they are young, I am able to see that my kids have a strong desire to provide for them, even when we’re away. The desire to give something to someone is the basic human instinct. It should be possible to transfer it on to your children. “And with the Conservatives it is not possible for the tax man to get his hands on this.” According to the independent Institute for Fiscal Studies, cutting inheritance tax for properties worth more than PS1million would be a disproportionate benefit for the rich. Video: Mr. Cameron speaks out about inheritance taxes
