Inheritance Tax applies to estates worth £300,000 or more. Any assets above the threshold are taxed at40 per cent.

If you leave £500,000, £200,000 is taxed. The Treasury reaches intot eh grave and takes £80,000 form the deceased’s estate. Fair?

It earns the Government around £4billion a year.

It is a revolting tax that impacts on estates left by the dead.

But it’s only for the rich, right?

Wrong. The housing boom means that more of us are snared by IH. There are now around two million properties worth in excess of £300,000. Last year 270,000 estates paid the tax. In 1997, when Labour came into power, the figure was 165,000.

Over that period, housing has risen in value by 190 per cent! The tax threshold has lifted from £215,000 to £333,000 – 40 per cent!

The Government reaps around £250billion a year from income tax. IH accounts for less than 1 per cent of the haul. But it’s a nice little earner.

And now the Conservative says that a Tory Government should abolish inheritance tax.

They might not. Shadow Chancellor George Osborne says he would look very closely at the idea.

Led by former Cabinet minister, the Vulcan-like John Redwood, the Competitive Challenge working group says the Government has introduced many "stealth taxes" since Labour came to power 10 years ago.

"This has become even more true as the swift rise of house prices in much of the country has resulted in many people, who could not in any sense be described as rich, suddenly finding that their family will be liable to pay quite substantial amounts upon their estate.

"We recommend the abolition of inheritance tax."

Do you think IH should go? Have your say…

Quotes [via BBC]

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Comments

The inheritance tax is a useful mechanism for ensuring that wealth and property are redistributed into society instead of being hoarded by families over the generations. Without it we'd soon see the social structure of this country return to the days of land barons and serfs. Frankly, the gap between the property haves and have nots has grown worryingly wide over the past decade - if we allow people to inherit their parents' homes without paying any tax, the situation will get much much worse.

Posted by: Lance | August 18, 2007 5:38 PM

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