David Cameron has claimed that he still aims to raise the threshold for inheritance tax so that only “the rich” will be liable for it. He has hinted that a pledge to this effect may go into the Conservative Party’s manifesto for the election next year.
Previously, the party made a pledge to this effect in their manifesto for the last general election. George Osborne, at that time shadow chancellor, said that the threshold would be raised to £1 million – more than triple the previous threshold of £300,000. However, this was not done, and Mr Cameron has claimed that it was because of opposition from the Liberal Democrat portion of the coalition government.
Mr Cameron’s claims and hints came in a question and answer session in Peacehaven, East Sussex which was hosted by Saga. He was asked if the original pledge, which was first made in 2007 as well as featuring in the 2010 election manifesto for the party, still applied. In response, Cameron said “Would I like to go further in future – yes I would.”
Cameron went on to say: “I believe in people being able to pass money down through the generations and pass things onto their children. You build a stronger society like that.” He also pointed out that “Quite a lot of hard-working families, who had worked hard and saved, and put money into their house were being caught by inheritance tax.”
He addressed the fact that the party had not implemented the change during their time as the larger part of a coalition government, describing his Lib Dem colleagues as “very opposed” to the idea. However, he also hinted that the policy may be revived in their manifesto for the next election, for implementation if they become the sole leading party forming the next government. Specifically, he said: “The ambition is still there. I would like to go further. It is better than it was… and it is something we will have to address in our manifesto.”
At the time the pledge was originally made in 2007, inheritance tax took effect on estates worth more than £300,000. Following some changes that were later made by the labour government of the time, inheritance tax now applies to estates worth over £325,000 at a rate of 40%. Married couples and civil partners can effectively increase the threshold to £650,000 on the death of the second partner.