Inheritance tax has come out top in a survey of the most hated taxes that Brits would like to see reformed in this year’s Budget.
A survey by accountancy firm Maclntyre Hudson found that 82% of taxpayers would like to see the threshold on inheritance tax raised in Alistair Darling’s first Budget on 12 March.
A further 80% of people surveyed want Darling to increase the threshold for higher rate income tax, while 78% want the rate of Stamp Duty lowered and 75% want council tax to be reduced.
Inheritance Tax is payable at 40% on some estates following a death or when the assets are transferred into a discretionary trust or to a company. It only applies on the value of the estate above the nil rate band, currently £300,000 for the 2007/08 tax year.
Although inheritance tax was originally introduced to tax the super-rich, critics say that massive house price inflation mean increasing numbers of middle-income families are being burdened with it. The nil rate band, or threshold for inheritance tax, has increased over the years but not by the same rate that properties in the UK have increased in value.
In last year’s pre-Budget report, Darling changed the rules to allow married couples and those in civil partnerships to combine their £300,000 allowances. This meant that they would not have to pay inheritance tax on the first £600,000 of their estate.
According to Halifax, there are three million properties above the £300,000 threshold and 600,000 above the £600,000 threshold.
Nigel May, tax principle at MacIntyre Hudson, said: “While the majority support the chancellor’s decision to make the inheritance tax allowance transferable between spouses upon death, the support for a higher threshold indicates that Darling needs to go further.”
Last year, the Conservative Party pledged to raise the threshold for inheritance tax so that only properties worth more than £1 million would face a bill.
The MacIntyre Hudson survey also found that 80% of taxpayers think that first-time buyers should be exempt from paying stamp duty. Currently, stamp duty is payable at 1% of the value of any house worth more than £125,000. For properties over £250,000 stamp duty increases to 3%, and for properties over £500,000 it rises to 4%.
The Conservatives have also promised to scrap stamp duty for first-time buyers, and those surveyed want Darling to also introduce this policy.
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