Inheritance tax

The big news in the papers this morning is the Conservative proposal to raise the level of Inheritance Tax threshold to £1million.

Sky News reports:

The Conservatives have said they will take family homes out of inheritance tax by introducing a new allowance which effectively increases the threshold for tax to £1m.

David Cameron said that if his party wins the 7 May election, parents will be offered a new £175,000 allowance to enable them to pass property on to children tax-free after they die.

For properties worth more than £2m, the allowance will be gradually tapered away so that those worth more than £2.35m do not benefit.

Inheritance tax is currently payable at a rate of 40% on the value of an estate above the £325,000 threshold – or £650,000 if a couple takes advantage of the existing allowance.

It is thought around 22,000 families will benefit from the move by 2020 and Mr Cameron said the costs would be paid for by a £1bn raid on pension tax relief for people earning more than £150,000.

The Telegraph says:

David Cameron has announced a radical plan to cut inheritance tax, with a landmark election promise to protect millions of family homes from the “death duty”.

The Prime Minister is setting out reforms which will mean parents and grandparents can leave their homes and other assets worth up to £1 million entirely tax-free to younger generations.

At present, an estate worth £1 million is liable for an inheritance tax bill of £140,000.

The plan, which would take effect in 2017, honours a long-standing Conservative promise to cut inheritance tax, which Tories say has been blocked by the Liberal Democrats in Coalition.

Mr Cameron and the Chancellor, George Osborne, hope that the eye-catching pledge to keep the family home out of the taxman’s grasp will capture the public imagination over the next three-and-a-half weeks to Polling Day.

The plan will be paid for by imposing higher taxes on pension savings of people earning more than £150,000 a year.

The Mail cheers Chancellor George Osborne for the proposal.

Homeowners will get a £1billion-a-year inheritance tax windfall if the Tories win the General Election.

The pledge by George Osborne means that the vast majority of homeowners can leave all their money to their children – with not a penny going to the taxman. However, to stop Labour leader Ed Miliband portraying it as a ‘handout to the rich’, people with homes worth more than £2million will be banned from cashing in.

The £1billion annual giveaway will be paid for by slashing tax relief on pension contributions on those earning more than £150,000 a year. The announcement will be the centrepiece of the Conservative manifesto to be launched on Tuesday.

A new ‘family home allowance’ worth £175,000 each for husbands and wives will be added to the existing combined £650,000 in 2017, making £1million in total.

The Tories hope it will spark their Election campaign – which has been criticised as ‘lacklustre’ by some MPs – into life.

Mr Osborne and David Cameron hope the allowance will create ‘clear blue water’ between them and Labour and restore the Tories’ ‘homeowner’s friend’ reputation that sustained Margaret Thatcher in power for more than a decade.

By limiting the full benefit to homes worth a maximum of £2 million, they hope to silence Labour taunts that the Tories are the ‘party of multi-millionaires’.

The Express has a similar story which it claims is an exclusive.

PARENTS will be able to pass on £1million to their children duty free under Conservative plans to “take the family home out of inheritance tax”.

The reform, which David Cameron will announce today, would see the tax-free allowance raised to £500,000 per person where a property is involved.

In effect, the move will mean only the wealthiest in the country will have to pay the hated 40 per cent tax.

The cost will be met by restricting pension tax relief for those earning more than £150,000 a year, just one per cent of the population.

Announcing the decision today, the Prime Minister will say: “The wish to pass something on is about the most basic, human and natural instinct there is.

“That’s why for a long, long time I have wanted to act on inheritance.

“We’ve already done some important things. With the Conservatives, people can pass on their ISAs, and they’ll be able to pass on their pension pot tax-free.

“I can tell you today that the next Conservative government would go much further.

“We will take the family home out of inheritance tax.

“That home that you have worked and saved for belongs to you and your family.

“You should be able to pass it on to your children.

And the Sunday Times claims the policy was announced in their interview with the Prime Minister.

PARENTS will be able to pass on a family home worth up to £1m to their children without paying inheritance tax, David Cameron announces today in a move intended to fire up the Tory election campaign.

In an interview with The Sunday Times, the prime minister revealed that the Tory manifesto launched this week will boost the threshold to seven figures from April 2017.

In the most significant Conservative pledge of the campaign so far, he said the £1bn annual cost of the plan would be paid for by reducing the tax relief on pension contributions for people earning more than £150,000.

The individual tax-free allowance will be raised from £325,000 to £500,000 when a property is involved, giving a couple a shared £1m tax-free fund. Cameron said: “What this effectively does is take the family home out of inheritance tax. That is the right thing to do.

The Guardian claims the announcement was made by the Prime Minister on Twitter.

A Conservative government would take family homes out of inheritance tax by introducing a new allowance effectively increasing the threshold to £1m, David Cameron has announced.

Under Tory plans, parents will each be offered a new £175,000 allowance to enable them to pass property on to children tax-free after their death.

The new family home allowance will be transferable on the death of one spouse and can be added to the existing £325,000 transferable allowance to bring the tax-free total up to £1m.

For properties worth more than £2m, the allowance will be gradually tapered away, so that those with homes worth more than £2.35m do not benefit at all.

Brexit

Another Cabinet minister wants Britain out of the EU, says The Express.

DAVID Cameron was facing fresh pressure over Europe last night after another Tory Cabinet minister indicated support for Britain cutting ties to Brussels.

In a surprise outburst, Health Secretary Jeremy Hunt pledged to vote for UK withdrawal from the European Union in a national referendum unless the Prime Minister wins back significant powers from the bloated bureaucracy.

Asked on BBC Radio 5 Live if he would support a British exit from the EU, he said: “If we don’t get the deal that we need, yes I would.”

His remark means the Health Secretary joins a string of other senior Tories including Chief Whip Michael Gove, Foreign Secretary Philip Hammond and Work and Pensions Secretary Iain Duncan Smith in threatening to back leaving the EU.

The ‘dead heat’ General Election

The Telegraph claims the two major parties will win the same number of votes.

Labour and the Conservatives will draw the election by getting an almost identical amount of votes, Britain’s public has predicted in an exclusive poll for The Telegraph.

Just a tenth of a percentage point will separate the proportion of votes won by the two parties after all the ballots are cast on May 7, the electorate has forecast.

But in a boost for the Tories, David Cameron and George Osborne have overtaken Labour’s Ed Miliband and Ed Balls as the pair who would most help families with the “cost of living”.

The Mail carries a similar story.

The Conservative and Labour parties will get a nearly identical number of votes in the general election, a new poll predicts.

The two major parties will only be separated by 0.1 per cent, according to the Daily Telegraph survey, leaving either UKIP or the Liberal Democrats as potential kingmakers in a future coalition.

The poll puts David Cameron and the Tories at 31.8 per cent of the vote, with Labour at just one tenth of a percentage point behind, with 31.7 per cent.

The survey, conducted by the ICM Wisdom Index for the Daily Telegraph, asked 2,000 Britons to predict the share of the votes each party would get in the general election next month.

‘Non-doms’

The Times claims the Governor of the Bank of England will be hit by Labour’s plans to scrap the non-dom tax status.

THE cream of British banking, including Mark Carney and the bosses of the two taxpayer-backed banks, will be hit by Ed Miliband’s plan to scrap the non-dom tax status.

The governor of the Bank of England and the heads of Lloyds and Royal Bank of Scotland (RBS) face higher taxes if Labour wins the election next month. The chief executives of HSBC and the insurer Aviva, the incoming chairman of Barclays and one of the heads of Goldman Sachs’ London operation are also non-doms.

The Bank of England yesterday defended Carney’s tax status. “This is not a choice. It is the straightforward outcome of the tests that determine domicile status in the UK,” it said. “The governor pays full UK taxes on all earnings, including his housing allowance.”

Nicola Sturgeon

In the Mirror, former Deputy Premier John Prescott says the Scot Nat leader should not be trusted.

I have been in some scrapes in my political life.

Being shouted at on Liverpool docks as a young union official, turning round a crowd of striking miners who felt betrayed by Kinnock – and of course that incident with an egg in Rhyl.

But nothing compared to the ­Scottish Referendum last year.

The hatred shown by nationalists towards anyone who questioned ­independence was ugly and brutal.

I remember having SNP supporters scream “traitor” into my face, their spittle like venom.

Those who dared put up pro-UK posters ended up with their windows smashed. People became too ­frightened to speak out.

But when the vote happened, that silent majority found its voice and 55 per cent of Scots said “naw”.

Now after licking its wounds and egos, the SNP wants payback.

Houses of Parliament renovated

Plans to spend millions on renovating the Palace of Westminster mean Parliament will have to meet somewhere else, says the Independent.

MPs and peers are set to move from the Gothic majesty of the Palace of Westminster to a conference centre that is derided as one of London’s ugliest buildings, when the Houses of Parliament undergo essential renovation.

The Independent on Sunday has learnt that the coalition quietly shelved the idea of including the Queen Elizabeth II centre in a “for sale” list after ministers were told it was a “no-brainer” for it to become Parliament’s temporary home when the palace is refurbished. The Speaker of the House of Commons, John Bercow, recently warned that the palace, which is slowly sinking into the river Thames, will have to be permanently vacated within 20 years unless extensive work starts soon.

An investigation has revealed:

* a post-election report will confirm that MPs and peers must move out while renovation work takes place;

* the cost has probably been underestimated by around £1bn;

* Parliament could have to close for longer than the five years mooted;

* cleaning up the courtyards alone will cost “tens of millions” of pounds and take six years.

Tax discs

Away from politics, motorists are falling foul of DVLA rules, says the Guardian.

Thousands of law-abiding motorists are having their cars towed away and having being charged fines of as much as £800 after unwittingly falling foul of car tax rule changes introduced by the DVLA. Figures obtained by Guardian Money reveal that DVLA clampings have risen dramatically since October, when the agency did away with paper vehicle excise duty discs.

Before the changes DVLA was clamping about 5,000 vehicles a month, but this has surged to more than 8,000 – with motorists horrified to discover their cars being towed away without even a warning letter from the agency. In total, more than 100,000 vehicles are likely to be clamped this year compared with 60,000 the year before.

While most motorists know that tax discs are no longer required, what is catching out many is that vehicle excise duty is automatically cancelled if a car changes ownership – even if there is a valid disc in the window.

Previously, anyone selling a used car could post adverts saying “Taxed and MOTd” until a certain date. But now when a car is sold the tax, even if it has many months to run, automatically expires and the new owner has to tax it again. It is this change that is exposing drivers to clamping by the DVLA and large fines.

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