The TaxPayers' Alliance - Media Coverage

Daily Telegraph: Inheritance tax to earn Treasury an extra pounds 400m

by Harry Wallop, Consumer Affairs Correspondent

A RECORD number of families will be hit by inheritance tax this year, with the Treasury expected to rake in an extra pounds 400 million, according to figures released by the Government yesterday.

In total the Treasury is expected to receive pounds 3.89 billion from the tax - an increase of 10 per cent on the last financial year, with the average family affected having to hand over pounds 111,000.

The figures, released by HM Revenue & Customs, came on the same day that separate Government data showed an increasing number of home owners paying stamp duty.

Government critics said the figures were proof that Gordon Brown's strategy of stealth taxes - introduced when he was in charge of the Treasury - showed no signs of slowing down now that he had moved to Number 10.

Ray Boulger, at the mortgage broker John Charcol, has started a petition to change stamp duty.

He said: "It's a classic stealth tax that has trapped an increasing number of people. It has to be changed to make it more sensible.''

The figures yesterday showed that 16,000 more home-buyers paid the tax in July, August and September than in the same period last year.

Last year, 59 per cent of all property transactions were liable for stamp duty, according to the HM Revenue and Customs, but in recent months 64 per cent paid, as the Government benefited from ever-rising property prices.

Experts said that these figures underestimated the number of people paying the duty, because they included land transactions and did not focus purely on residential property.

Land Registry figures suggest that one in eight home buyers now pays the duty.

The record Inheritance Tax windfall for the Treasury this year will come despite a recent announcement by Alistair Darling, the Chancellor, that from next year couples would be allowed to merge their allowances - doubling it to pounds 600,000.

A Treasury spokesman said: "The changes made by the Chancellor in the Pre-Budget Report made the IHT system fairer.''

However, the number of estates that have to pay the tax is expected to climb from 33,000 to 35,000 this year and the spokesman admitted that the Chancellor's initiative would not mean that significant numbers of bereaved families would be freed from paying the tax in future.

The forecast is also proof that the majority of couples already take advantage of existing loopholes to reduce the amount of inheritance tax they pay.

Even after a full year of the new allowances being in force, the Treasury estimates that it will receive pounds 3.3 billion - the same amount it received in the year to March 2006.

Property experts say stamp duty is starting to distort the housing market by making it too expensive for people to move house, or too difficult to get on to the housing ladder.

Corin Taylor, of the TaxPayers' Alliance, said: "Not only has the Treasury failed to raise the thresholds, they have also increased the rates paid on more expensive properties. It really has put the squeeze on middle-class families.''

The Mail on Sunday: EXPOSED: HOW ALISTAIR DARLING (AND TONY BENN) EXPLOITED DEATH TAX LOOPHOLE

THE family of Alistair Darling exploited a loophole in tax rules to avoid death duties worth tens of thousands of pounds.

The Chancellor received a £38,500 windfall when his father died leaving a will designed to minimise his children's inheritance tax bill.

Furthermore, Mr Darling has declined to say whether he is using a second avoidance method involving the sale of his mother's £1.4million mansion.

He is not the only Cabinet Minister using death-duty loopholes. Environment Secretary Hilary Benn is exploiting a scheme designed to cut the potential tax bill on his father, Left-winger Tony Benn's £4million Notting Hill home.

The disclosures will be an embarrassment for Labour, which last week announced inheritance tax reforms designed to compete with the Tories' plans to abolish the duty on estates worth up to £1million.

In his pre-Budget statement, Mr Darling pledged that, in future, married couples would be able to combine their £300,000 tax-free allowances. Experts, however, said the move was less generous than it appeared, and merely allowed married couples to take advantage of tax breaks already enjoyed by the wealthy.

For many years, those who can afford a lawyer have been able to draw up wills that cut the family tax bill by ensuring each spouse's zero-rated tax allowance is used in full.

A Mail on Sunday investigation can reveal Mr Darling's family employed just such a scheme.

Mr Darling's engineer father Thomas died aged 73 in 1995, leaving an estate - excluding property - worth £352,285. The key part of his will states: 'I bequeath a legacy of the maximum amount which I can bequeath without attracting inheritance tax on my death equally among my children.'

It goes on to state that any remaining funds should be given to his widow Anna. These would not incur death duties. The inheritance tax threshold in 1995 stood at £154,000. Mr Darling, as one of four children, would have therefore inherited a quarter of that sum - £38,500.

The idea behind the will was that when Mrs Darling eventually died her estate would be at least £154,000 smaller, leading to a potential net saving of £61,000 in taxes. Ironically, thanks to the reforms announced last week, it is unlikely the Darlings will now save money from the scheme.

In 2001, the Chancellor's mother sold the family home in the exclusive Morningside district of Edinburgh for £1.4million. Experts said this sort of sale is consistent with a second - legal - inheritance tax-avoidance method.

Accountants advise the elderly who 'downsize' to give any money they can afford to their children. Such a gift can be made tax-free, provided the parent lives for a further seven years.

If they die within this period, gifts become liable for inheritance tax.

Therefore if Mrs Darling did hand over the proceeds of the house sale to her children in 2001, she needs to live only a further year to ensure they escape paying death duties.

It would be a potentially massive saving. An estate of £1.4million would normally incur a tax bill of £440,000.

A spokesman for Mr Darling said: 'His father's will has been publicly available. Throughout, his family has acted entirely properly.'

Hilary Benn is also involved in a scheme to minimise his family's death-duty bill when his father Tony, 82, dies. Land Registry records show the 53-year-old Minister became a part owner of his father's £4million London house shortly after the death of his mother Caroline in late 2000.

The change of ownership, giving three of the Benn children a stake, is dated August 17, 2001. Tax experts say it is likely to be the result of a 'deed of variation'. This is a legal procedure whereby a will can be altered posthumously to use up a spouse's zero-rated death-duty allowance.

Experts say it is typical in these situations for children to be given a stake in the family home worth up to the limit of the tax threshold which in 2000 stood at £234,000. Like the Darling scheme, the transfer to the Benn children means when their father dies his estate will be smaller and therefore the death-duty bill will be lower.

Neither Tony nor Hilary Benn wished to commentt.

Matthew Elliott, chief executive of the Taxpayers' Alliance, said: 'The double standards of these ministers is breathtaking.'

Daily Express: Now we force Brown to cut Death Tax

By Macer Hall, Political Editor

Another victory for the Daily Express

DAILY Express readers achieved their greatest victory last night as the Government sounded the retreat over inheritance tax.

Chancellor Alistair Darling announced an immediate doubling of the threshold for the death duty to £600,000.

He also promised in future to "take both house prices and inflation into account when setting inheritance tax thresholds". His surprise move represents a huge climbdown by Gordon Brown in the face of massive pressure from Daily Express readers.

This newspaper's crusade against the death tax – backed by more than 350,000 people – is widely seen to have transformed Britain's political landscape.

Last week, the Conservatives turned around months of declining popularity by promising to raise the inheritance tax threshold to £1million. The move proved so popular a cross the country that Gordon Brown was forced to shelve plans for an autumn election as the Tories' approval rating in the polls soared.

Last night, the Prime Minister was accused of executing his most shameless attempt so far to court the middle-class vote by stealing Tory policies.

Shadow Chancellor George Osborne branded the move "a cynical stunt from a desperate and weak Prime Minister" and a "tax con".

Later he added: "Gordon Brown wouldn't be even talking about inheritance tax if it hadn't been for the Daily Express crusade.

"But, unfortunately, if you look at the small print, it's a tax con not a tax cut for the many hundreds of thousands of people who do sensible tax planning."

Last night Mr Darling's boasts of a tax cut did indeed start to unravel as analysts examined the details and confirmed that many families who take financial advice to minimise death duty liability will be no better off.

Carolyn Steppler, tax director at KPMG, said: "This change, although likely to grab headlines, is in practice only giving to most people what they already have.

"Many married couples will a lready have drafted wills to allow each spouse to take advantage of their nil rate band through the use of a discretionary trust. This was possible even for the family home.

"It is very disappointing to note that the proposals will not benefit unmarried or non-civil partnership couples, or siblings who have lived together as in the recent case of the elderly Burden sisters.

"They had lived together all their lives before one sister faced having to sell the house in her eighties when her sister died." Liberal Democrat Treasury spokesman Vince Cable said: "This does nothing for the many families who have separated or chose not to enter into a marriage or civil partnership." Ian Maston, director of inheritance tax at tax experts Chiltern, said: "Prudent people would have already arranged their wills to achieve this anyway, so the Chancellor's announcement won't save them a penny." There was also anger about the many bereaved families on modest incomes who have been hammered by Mr Brown's death duty stealth tax over the last decade.

Financial experts did confirm, however, that millions of families will now be freed from the threat on the crippling 40 per cent death duty as a result of the Daily Express crusade.

Tributes poured in last night for the paper's central role in forcing the Government's hand. Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "This announcement is fantastic news for families who deserve to keep more of their own money to pass on to the next generation.

"Thanks to the sustained pressure of Daily Express readers, politicians are now competing with each other to reduce the unfair death tax.

"Cutting taxes is a vote winner, and just what hard-pressed families need." John Riches, of the Society of Trust and Estate Practitioners, said: "Middle England will breathe a sigh of relief at the Chancellor's reforms, due in large part to the political pressure created by the Daily Express crusade." Mr Darling's inheritance tax plan – revealed in his autumn statement – caused astonishment on both sides of the Commons. His announcement went much further than expected, as many financial experts had forecast that the Treasury would spend months reviewing inheritance rules. Instead, Mr Darling, in his first set-piece Commons occasion as Chancellor, announced an instant shake-up.

Under the Chancellor's proposals, married couples and civil partners will have a combined inheritance tax threshold of £600,000. That figure will rise to £700,000 by 2010.

It means that couples can transfer their tax allowance to their partners, so the 40 per cent levy will not be charged on the first £600,000 of their estate.

The allowance will also be backdated, so hundreds of thousands of widows and widowers will benefit from the move. He claimed his measures were "fair and affordable".

But the move represents a massive turnaround after Labour has spent years sneering at calls for the ever-tightening tax threat to be curbed. To jeers from Conservative MPs, Mr Darling told the Commons:

"I want to ensure that husbands and wives can benefit from each others' unused inheritance tax exemptions." He added: "To ensure that people who have already lost their husband or wife will also benefit, I will backdate this indefinitely for every widow or widower.

"In future we will take both house prices and inflation into account when setting inheritance tax thresholds." The Treasury will fund the £1.5billion cost of the tax cut by raising new taxes on foreign tycoons and introducing a green tax on airline flights – both proposals outlined by the Conservatives last week.

The move was being seen as a panic measure by the Government in response to the Conservatives promising to raise the inheritance tax threshold to £1million for all.

Mr Darling's move did not go as far, but millions of middle-income households will still benefit.

In the past, ministers and Labour MPs have sneered at the crusade to abolish inheritance tax.

When more than 120,000 backed an online petition calling for the tax to be scrapped, Downing Street replied by claiming that reducing death duty would hit schools and hospitals.

One Treasury official risked ridicule last night by claiming: "The Government always planned to do something to make inheritance tax fairer." During Mr Brown's decade as Chancellor, the Treasury grab from inheritance tax more than doubled to nearly £4billion a year.

He was accused of manipulating thresholds in order to use the levy as a stealth tax on bereaved families.

The move was also an embarrassment for many Labour MPs who support inheritance tax.

Just a few hours before the statement, Tony Lloyd, chairman of the Parliamentary Labour Party, warned that a cut in inheritance tax would benefit the better-off.

Daily Express: What took you so long, Gordon?

Campaigners praised the Daily Express role in forcing a possible change.  Matthew Elliott, chief executive of campaign group the TaxPayers' Alliance, said: "For a long time, the Daily Express was almost a lone voice in the media on this issue.  Now everybody seems to be claiming credit for the movement for change.

"Ten out of 10 for the Daily Express's persistence.  If we win, it'll be the Express 'wot won it'."

He added, "Slowly but surely, the whole political climate around inheritance tax is changing.  The Tories clearly understand people's fury over its blatant unfairness and now it looks like Gordon Brown is waking up to the public's anger.

"The Government has an opportunity on Tuesday to sound the death knell for the death tax."

Daily Express: Victory for Daily Express readers

By Macer Hall, Political Editor

Tories will raise inheritance tax threshold to £1 million

DAILY Express readers achieved a spectacular victory against Gordon Brown's unjust inheritance tax yesterday when the Tories sounded "the death knell for the death tax".

Conservative Shadow Chancellor George Osborne committed his party to hiking the death duty threshold to £1million.

The radical move - inspired by the Daily Express's crusade against the punitive raids on family savings and assets - would free nine million households from the crippling stealth tax used by Mr Brown over the past decade to squeeze Middle Britain.

And the Tory policy announcement will put intense pressure on the Prime Minister to address the misery caused by his hated £4billion-a-year grave robbery.

Mr Osborne said after making his pledge yesterday: "The Daily Express has boldly been at the forefront of the campaign on inheritance tax.

"With this announcement, I have shown that the Conservative Party cares about Express readers and is listening to their concerns.

"Thank you Express readers for your sustained campaign. You have spoken for millions of Britons."

Campaigners last night praised the hundreds of thousands of Daily Express readers who have supported the crusade for turning inheritance tax into a central issue in British politics.

Matthew Elliott, of the TaxPayers' Alliance campaign, said: "Daily Express readers deserve a big pat on the back for supporting the campaign and the newspaper deserves a medal for keeping the issue on the agenda.

"Three cheers for the Daily Express and the Conservatives.

Now we've got to convince Gordon Brown."

Tory MP Douglas Carswell said: "This is a victory for common sense and Daily Express readers.

"It gives a really clear idea of what difference to Britain a Conservative government could make."

Mr Osborne's announcement earned him the biggest cheer so far at the Tory Party conference in Blackpool.

He said: "In Conservative Britain you will not be punished for working hard and saving hard. You will not be penalised for wanting a better life for your children."

The move set nerves jangling at Number 10 yesterday, rocking Mr Brown's deliberations over whether to hold a general election next month.

His aides fear inheritance tax - the most despised tax in Britain - will become a key issue at the next election.

The Daily Express has run its crusade to abolish the tax for almost two years.

More than 350,000 readers signed our petition to the Treasury last year urging the scrapping of the duty.

And more than 120,000 people backed our internet petition on the Downing Street website earlier this year.

At present, more than four out of 10 households are threatened by the death duty, levied at 40 per cent on all estates worth more than £300,000.

Under the Tory proposals, just two per cent of households would be in line for the tax.

Mr Osborne also pledged to double the threshold on stamp duty to £250,000 to benefit 200,000 first-time homebuyers a year.

To pay for the tax cuts, he plans a new £25,000-ayear tax on wealthy foreigners living in the UK.

Retired couple Trevor and Janet Hindle are exactly the type of voters likely to be swayed by the latest Tory proposals.

The couple, whose home in Burbage, Leics, is worth £325,000, fear everything they have worked for will not be passed to their children when they die.

Retired computer analyst Mr Hindle, 62, said: "We literally had nothing 40 years ago and we worked very hard and paid our taxes but are put in the position where a lot of that could disappear."

He added: "This is certainly a good idea, it is what we all want.

"The threshold hasn't kept up with the rise in house prices, which have gone up enormously."

Daily Express: Daily Express has spoken for millions

By Macer Hall, Political Editor

DAVID Cameron's Tories made their boldest appeal yet to reclaim the hearts of Middle Britain yesterday by promising to raise the inheritance duty threshold to £1million.

Shadow Chancellor George Osborne set the Conservative conference alight by sounding "the death knell" for the duty, lifting nine million households from the tax trap.

"For millions of people, today sounds the death knell for death taxes, " he told the delighted Tory grassroots, earning the biggest roar of approval of the week so far.

Activists interrupted the speech with a 30s econds-long burst of applause and cheering.

The new Tory policy represents a giant leap forward for the Daily Express crusade against the nightmare of death duty.

Mr Osborne's pledge was part of a package of tax proposals designed to reward the hardworking, middle-income families so squeezed by stealth taxation under Gordon Brown.

He called his proposals the "most important reform of capital taxes for a generation" signalling his determination to champion the "aspirations of ordinary people."

He also offered a huge boost to first-time buyers vowing to raise the Stamp Duty threshold from £125,000 to £250,000, saving 200,000 purchasers a year an average of £2,000.

"We will take 10million people out of these taxes on aspiration, " Mr Osborne said.

The estimated £3.5billion cost of the two tax cuts would be made up by a new annual levy on people registered as living abroad.

Around 150,000 people would be liable for the £25,000 a year charge, the Tories estimate.

Low tax campaigners were quick to respond. Matthew Elliott of the TaxPayers' Alliance said: "It's great news that ordinary families could no longer have to pay inheritance tax and that young couples will be exempted from stamp duty when they buy their first home."

Nicholas Hughes, of tax advisers Chilterns, said: "If this becomes law, it will take millions of estates out of Inheritance Tax, because the threshold for a married couple will effectively be £2million. This promise knocks Gordon Brown's current plans into a cocked hat. It will certainly put Labour under huge pressure on Inheritance Tax in this autumn's prebudget report."

Mr Osborne said the desire to pass on wealth to future generations was "the most basic human instinct of all." He pledged help for people who "aspire to a better life for their children and their grandchildren. Our Government will be on their side, " he said.

Mr Osborne went on: "When inheritance tax was first introduced it was designed to hit the very rich. But the very rich hire expensive advisers to make sure they don't pay it.

"Instead, thanks to Gordon Brown, this unfair tax falls increasingly on the aspirations of ordinary people."

He said that "well over a third of homeowners in Britain have the threat of inheritance tax hanging over them."

Mr Osborne said the move would take the family home out of inheritance tax for the vast majority of cases.

"In a Conservative Britain, only millionaires will pay death duties, " he said.

He accused Mr Brown of taxing a generation out of home ownership and taking away the homes from families who have saved all their lives.

Mr Osborne said: "We are the party of aspiration. And I for one am happy to put these clear choices before the British people at a general election."

Mr Osborne vowed to put economic stability first but also to seek to lower the tax burden.

He said. "I believe lower, simpler taxes are vital for Britain to compete."

Tory activists in Blackpool were buoyant. One said: "At last, a policy to get really excited about."

Last night, questions were raised about whether the levy on those registered as living abroad could hit the economy by driving entrepreneurs out of the country.

Carl Emmerson of think tank the Institute for Fiscal Studies, said: "We don't know exactly how many there are in that position, let alone how many will choose to pay the £25,000 a year that Mr Osborne wants to charge them."

And Confederation of British Industry chief Richard Lambert said: "The taxation of nondomiciled individuals needs to be carefully considered in the context of the contribution that they bring to the country as a whole."

The inheritance tax pledge sent shockwaves through Labour, threatening Gordon Brown's hopes of winning a snap general election.

But Chancellor Alistair Darling said: "George Osborne cannot afford the promises he is making. He cannot afford to cut inheritance tax. There is a gaping black hole at the heart of their tax and spending plans."

Daily Telegraph: Inheritance tax 'snaring 135 homes a day'

By Faith Archer and Harry Wallop

More than 135 homes a day will be trapped in the inheritance tax net over the next year, according to research by Britain's biggest mortgage lender.

Halifax estimates that over the next 12 months, 50,000 extra properties will be pushed over the limit above which bereaved families must pay 40 per cent inheritance tax when the owner dies. These will be in addition to the 2.3?million homes already worth more than the inheritance tax threshold, according to the lender.

Even if house price growth slows to five per cent over the next year – less than half the 11 per cent seen over the last 12 months – many more homeowners risk paying the much-hated tax despite the threshold increasing from £300,000 to £312,000 next April.
advertisement

The figures come less than a week after The Daily Telegraph disclosed that HM Revenue and Customs was launching a crackdown on the seven-year gift rules for the inheritance tax.

Martin Ellis, the Halifax's chief economist, said: "The Government's continuing failure to index the inheritance threshold in line with house price inflation will leave even more people potentially liable to the tax.

"Only 6 per cent of estates may currently pay inheritance tax, but we are set to see further big increases in that proportion over the coming years."

Looking to 2010, Warren Bright, the chief executive of online estate agent propertyfinder.com, said: "To reach the planned inheritance tax threshold of £350,000 in three years, house prices need rise at only 3.7 per cent a year, barely more than inflation. Even with this modest increase, 15 per cent of homes will be worth this much in three years' time."

Corin Taylor, the research director at the TaxPayers' Alliance, argued that inheritance tax is particularly unfair because it is a "double tax". He pointed out that most people had paid for their houses out of their income, which had already been taxed. "If Gordon Brown understands the concerns of taxpayers, he will rein in Revenue and Customs and abolish inheritance tax in October's Pre-Budget Report," he said.

The tax has become an increasingly important source of revenue for the Treasury, doubling from £1.7billion 10 years ago to £3.3billion last year.

Some property experts believe the tax will start to affect the property market, making it harder for first-time buyers to get on the housing ladder.

"As housing wealth is taken from older generations when they die, less money is available through inheritance to help younger groups," Mr Bright said.

The Revenue said the tax was a "fair and necessary means of raising revenue for public services".

Daily Express: Labour: Why we love the inheritance tax that everyone hates

Matthew Elliott, of the TaxPayers' Alliance campaign, said:  "People who attend the conference are not representative of the public.  They are Old Labour, unreconstructed ideologues who are out of touch and out of date."

Daily Express: Families face a new blow on death tax

By Macer Hall

Matthew Elliott of the TaxPayers' Alliance said: "The death tax is hurting working families and undermining the incentive for people to strive for a better life for future generations."

Daily Express: At last! Tories hint they will axe inheritance tax

By Gabriel Milland

MILLIONS of families would be freed from the hated death tax under Tory tax proposals to be outlined today.

Former Cabinet minister John Redwood will call for inheritance tax to be abolished on family homes and most other assets.

He will also demand that the next Tory Government boost pensions and savings by abolishing stamp duty on buying and selling shares.

Mr Redwood’s proposals, contained in the final report by his Economic Competitiveness Policy Group, mean that David Cameron now faces a tough choice on whether to back ditching the death tax.

The Daily Express crusade to abolish inheritance tax attracted almost 130,000 signatures from readers earlier this year. Last year, readers signed almost 400,000 forms demanding an end to the tax, which penalises hard-working families everywhere. Although the tax was originally designed to snare only the super-wealthy, rising house prices have meant that ordinary middle-income earners are often forced to sell family homes after the death of a loved one.
Inheritance tax is regularly voted one of Britain’s most hated taxes, second only to council tax.

But it has also become one of Gordon Brown’s favourite “stealth taxes” – the former Chancellor has raked in almost £25billion since 1997.

Mr Brown has consistently refused to increase the threshold at which the 40 per cent tax starts having to be paid –  at present, £300,000 – in line with the soaring house prices.

Property prices have trebled since 1996, but the Inheritance Tax threshold has gone up by less than 50 per cent in the same time.

In 1996, the average house price was £69,657. This year it has climbed towards the £200,000 mark. The inheritance tax threshold, which was £200,000 in 1996, had only risen to £285,000 after 10 years.

The failure to raise the threshold in line with house price inflation means that the number caught by the levy each year has leapt by 80 per cent.

Mr Cameron is on holiday – but sources close to him have let it be known that he backs the thrust of the report.
He has always refused to promise tax cuts before the next General Election – claiming that it would be reckless to promise something the economy might not be able to afford.

A source close to Tory high command last night refused to say whether Mr Cameron would include Mr Redwood’s suggestions in the next Tory manifesto.

He added: “The report is what it is. These are just proposals at the moment. We’ll have to see if they become policy.”
Mr Redwood will be joined at the report’s formal launch by Shadow Chancellor George Osborne.

Under the Tory plans, inheritance tax would be completely abolished on “primary residences” – family homes.

Other assets passed on by a loved on would be liable to capital gains tax.

But Mr Redwood recommends that anything held for more than 10 years could be inherited free of tax – removing most family heirlooms and the like from the taxman’s grasp completely.

And he recommends that Inheritance Tax and stamp duty on shares should be abolished only when doing so does not threaten economic stability. Mr Redwood’s moves were welcomed last night by anti-tax campaigners who have called for the Tories to demonstrate that they understand how average Britons feel they are being taxed far too much.

TaxPayers’ Alliance chief executive Matthew Elliott said: “This announcement from John Redwood is very encouraging because it shows that at least one person in the Conservative Party understands that Britain’s growing tax burden is hitting families as well as businesses.

“The proposal is not a complete abolition of Inheritance Tax but, by excluding the main home, it will go a long way towards addressing the injustice of the death tax faced by millions of ordinary families across the country.”

The Halifax predicts that some 4.5million households will have to pay the tax – up from just 18,000 a year in 1997 – unless the threshold is dramatically raised or the tax abolished.

In another boost to families – especially for first-time buyers – Mr Redwood calls for the Tories to target stamp duty on the sale of property.

He also calls for the abolition of stamp duty on share sales.

Daily Express: £24 billion scandal of the inheritance tax trap

By Sarah O'Grady

The harsh toll of inheritance tax and stamp duty on middle Britain was condemned by the country’s biggest mortgage lender yesterday. The Halifax highlighted the tide of money pouring into Government coffers after ministers stubbornly refused to raise thresholds for both taxes in line with house price inflation. If they had been increased, the Halifax said inheritance tax would now start at £490,000 and three per cent stamp duty at £720,000 – not £250,000.

Buyers would not have to pay the four per cent rate until they bought a home worth £1.4million, rather than the current £500,000. Labour has raked in around £24.6billion in inheritance tax since 1997 and the number caught by the levy on death each year has leapt by 80 per cent.

Accountants Wilkins Kennedy predict that the amount of inheritance tax handed over to the Treasury will increase by 21 per cent to £4billion a year in 2007-08 – up from £1.6billion when Labour came to power in 1997.

Blair Gibbs, spokesman for the TaxPayers’ Alliance, said: “In­heritance tax barely registered as an issue in 1997 because the threshold was still well above average house prices. “But these figures show how, in just 10 years, Gordon Brown has allowed an estate duty to become a death tax that punishes millions of ordinary families. “This tax grab is completely immoral and should go.”

Roger Williams, a partner at Wilkins Kennedy, said: “This tax on death no longer catches the super rich and landed gentry. The tax now hits the averagely wealthy. It is people who just want to pass their family home down to the children that now face hefty tax bills.”

Based on average house price rises, 2.3million families’ properties will soon be valued at more than the current inheritance tax threshold of £300,000. These families now face a potentially crippling 40 per cent tax bill on any legacy over that figure. The Daily Express and its readers have fought a long-running crusade to abolish the tax backed by more than 300,000 supporters.

The Halifax revealed that home buyers in London were facing the heaviest burden as the average cost of a home has broken the £300,000 barrier for the first time. Typical house prices in the South-east have surged through the £250,000 mark to stand at £259,904. The Halifax said the gains during the second quarter of the year meant that the cost of an average property in London – now £313,000 – was higher on its own than the new £300,000 threshold at which inheritance tax kicks in.

Meanwhile, a home buyer in the South-east with an average-priced property would now have to pay stamp duty of three per cent of the value rather than one per cent. According to the Halifax, North­ern Ireland saw the strongest house price growth during the three months to the end of June, with the average cost of a home there rising by 8.5 per cent.

In Greater London, prices rose by 4.9 per cent, while in the north they were 4.3 per cent higher and in the South-east 4.2 per cent. The growth in the North pushed house prices there above the £150,000 threshold for the first time to average £155,188.