THE Tories are reviving controversial plans to axe inheritance tax as Rishi Sunak struggles to turn around his party’s major deficit in the polls, it has been reported.
The idea of slashing the tax, which would benefit the wealthy, was condemned by politicians and economists as “horrendous politics” when it was floated ahead of the Autumn Statement.
The Telegraph said senior figures in No 10 were now considering it for the Budget in March as one of a handful of major tax cuts as Sunak comes under continued pressure from Tory MPs.
It reported the idea is on the table as it would likely create a dividing line with Labour, which is unlikely to support such a cut.
Other cuts which are said to be being considered include increasing the threshold at which people start paying the 40 per cent rate of income tax and reducing the basic 20 per cent rate.
Inheritance tax is charged at 40 per cent for estates worth more than £325,000 with an extra £175,000 allowance towards a main residence if it is passed to children or grandchildren.
Latest figures show only 3.73% of UK deaths resulted in an inheritance tax charge, but abolishing the tax entirely would create a hole of around £8billion a year in the Treasury’s finances.
Meanwhile Housing Secretary Michael Gove suggested to the Times that the Conservatives will promise to cut the up-front cost of a home for first-time buyers in a pre-election giveaway.
Ministers are said to be considering Government support for longer fixed-term mortgages to reduce the size of deposits for first-time buyers.
Both reports emerged as Sunak struggles to turn the tide in favour of his party as Labour sits around 20 points clear in the polls.
The Government has not commented on either of the reports.
