Tories ‘consider scrapping inheritance tax to win over voters’ – costing Treasury £7bn a year | Political news

The senior Tories are said to be discussing scrapping inheritance tax – at an annual cost to the Treasury of £7billion – in a bid to win over voters ahead of the next election.

Downing Street is in talks on whether to scrap the levy in a bid to bolster votes in so-called “blue wall” seats ahead of the 2025 general election.

Supporters say it could be a game-changer in the south of England, where the Tories fear losing seats to opposition parties, according to the Times.

Discussions take place a few days before three conservative by-elections take place on Thursday.

The votes could see Rishi Sunak becoming the first prime minister since Harold Wilson in 1968 to concede three seats in by-elections on the same day.

With the party trailing Labor in official polls, the abolition of inheritance tax could be seen as a manifesto promise rather than a policy to be implemented next year.

A source told the newspaper: “It’s about being an ambitious country.

“You work hard, play hard and pass on your wealth. It’s a live chat.”

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‘Will it cost you at the polls?’

What are inheritance rights?

Inheritance tax is a charge on the estate – including property, money and possessions – of a deceased person.

People with an estate worth less than £325,000 generally do not have to pay inheritance tax, but the value must still be declared.

Anyone with an estate above this value is liable to pay a standard tax of 40% on the amount above the £325,000 threshold.

However, if you give your home to your children or grandchildren, the threshold can be as high as £500,000.

Two people cohabiting with a joint tenancy could only be subject to inheritance tax where one person dies and the value of the property exceeds £650,000.

A spouse or civil partner can pass on up to £1million, including their home, without any inheritance tax.

The average house price is £285,000, according to the latest official figures.

But abolishing inheritance tax could cost the Treasury up to £7billion a year as the nation continues to struggle with a cost of living crisis And inflation remains high.

A Treasury spokesperson said the vast majority of estates do not pay inheritance tax, with more than 93% of estates expected to have zero inheritance tax in coming years.

However, they added: ‘The levy raises over £7billion a year to help fund public services that millions of us rely on every day.’

The inheritance tax talks come days after the government pledged to give millions of public sector workers, including teachers and doctors, a 6% salary increase.

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“Wage increase not financed by the loan”

The pay rise will not be financed by borrowing, insisted Chancellor Jeremy Hunt.

A Downing Street source said of the inheritance tax claims: “The Prime Minister has repeatedly said he wants to cut taxes for citizens.

“As Conservatives, obviously, we want people to keep more of their own money.

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“But the current economic situation means the government is fully focused on halving inflation – to help people have more in their pockets at the end of each month.

“That kind of speculation about the future is just not on the Prime Minister’s mind at the moment and requires a different kind of economic environment than the one in which we operate.”

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