Inheritance tax threshold could rise to £1m

24 March 2014

David Cameron has suggested a Conservative government would increase the inheritance tax threshold from £325,000 to nearer £1 million.

Replying to a pensioner who criticised his party for failing to put up the threshold to £1 million at a question and answer session near Brighton, the Prime Minister said: "We put in our manifesto that we wanted to take it to £1 million but we did not win an outright majority [and] the pledge did not make it into the Coalition agreement.

"Would I like to go further in future? Yes I would. I believe in people being able to pass things down through the generations and onto our children, it builds a stronger society.

"Inheritance tax should only really be paid by the rich, it shouldn't be paid by those people who have worked hard and saved and brought a family house.

"The ambition is still there, I would like to go further. It's something we'll have to address in our election manifesto."

Over the next five years, the Office For Budget Responsibility said the proportion of estates getting lumbered with inheritance tax at 40% over the nil rate band of £325,000 would double from one in 20 in the current tax year to nearly one in 10 by 2018/19.

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