Reports in the national press today claim the Conservative Party has been drawing up plans to scrap inheritance tax on properties worth up to £1 million.
The news means the vast majority of middle-income, middle-class families and home owners in the UK would be able to pass on property to their children without a hefty 40% going to the government in tax. Under the new plans, homeowners and their kids would also reduce the inheritance tax bill on any property worth up to £2m by £140,000.
The news came from leaked documents written with the guidance of Treasury financial secretary, David Gauke, and the chancellor. The zero-tax rate on homes up to a million pounds would include any family home or residence transferred to a child of a parent who has died and includes step children and adopted children. It is expected to be announced in the chancellor's Budget this week.
Under current tax laws, a 40% tax is applied to any estate (including property and other savings or assets) that has a value of £325,000 or more. It is expected that the zero-rate tax on other types of assets less than £325,000 will remain the same.
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