Inheritance tax has been in the news a fair amount recently – we've been trying to keep up with the most recent developments as best we can – but the latest piece of news comes from David Cameron ahead of the general election next May, with the Prime Minister announcing that although he is aiming to increase the threshold for inheritance tax, it may take some time for a new policy to come into play.
In the House of Commons this week, Cameron indicated that despite vowing to increase the threshold for inheritance tax up to £1 million, the Conservative party may not be able to do so before the General Election. He said that he was trying to "shoehorn" in the policy, as it was unacceptable that the middle-classes were unable to bequeath the family home to their descendants without paying 40% tax.
Inheritance tax currently stands at £325,000, or £650,000 for a couple as it can be passed on to a surviving spouse after death. At the moment, single or divorced parents get caught in the inheritance tax net if they reside in areas with high house prices, such as London or the South East where prices average £514,000 and £338,000 respectively. It is predicted that the number of estates that fall into the current inheritance tax bracket will increase to one in ten by 2018.
Cameron stated that "inheritance tax should [only] be paid by the very wealthy, and I think you should be able to pass a family home on to your children rather than leave it to the taxman." This sort of announcement is expected to appeal greatly to elderly voters ahead of next year's election.
What do you think of Cameron's bid to increase the inheritance tax threshold? Do you think more should be done to bring the changes about sooner rather than later?