BY ALL accounts the Labour party are rattled at the idea put forward by the shadow chancellor, George Osborne, to raise the
inheritance tax (IHT) threshold to £1 million from its current £300,000. This would save an incredible £280,000 in the process for estates of this size.
Labour is even more miffed at the thought this could be funded by reducing tax breaks for wealthy non-domicile residents. This is an issue over which Gordon Brown, when chancellor, had been put under pressure from members of his own party for some time.
So round one to Osborne for putting forward these proposals, which should in my opinion be implemented by either party regardless of who has power next month or next May, the proposed election dates.
Taking the family home out of the IHT net has been an issue with me for some time, so is punishing innocent people for working and saving hard all their lives hoping to do no more than pass on their accumulated assets to their children when they die.
Whingeing Labour MPs have short memories, conveniently brushing aside their hideous tax changes voted through over the past decade. As chancellor, Brown systematically plundered our nation's pension funds swelling the Treasury's coffers by over £5 billion each year. In the process he destroyed our final-salary pension schemes, leaving thousands of retired workers facing serious financial hardship on the pittance they are being paid from the dregs at the bottom of our ex-chancellor's personal "piggy bank".
Throw in the ridiculous increases in stamp duty on property purchase along with other stealth taxes, such as removing tax credits on UK
dividends, reducing returns on saving schemes such as ISAs and PEPs, and you will see where I am coming from.
The ordinary UK saver deserves a better deal. The proposal to raise the IHT threshold is a step in the right direction. This is a definite vote winner for either political party and provides the foundation to creating a fairer system for all by encouraging real wealth creation which can be passed down the generations. So stop dithering over the issue, Alistair Darling, and do the right thing. Endorse these proposals, which could easily be funded from elsewhere in the system.
? Tom Munro is a Larbert-based independent financial adviser
