Downing Street is 'holding talks about scrapping inheritance tax'

2023-07-15

Tories ‘could scrap inheritance tax’ in a bid to win the next general election

Abolishing the levy could cost around £7billion a year, sources have said

Downing Street is holding talks about scrapping inheritance tax in a bid to win the next general election, sources have claimed.

Senior figures in No 10 are discussing abolishing the levy in a move that would cost around £7billion a year – but proponents believe it could help Conservatives cling on to ‘Blue Wall’ seats in the south of England, according to The Times.

Cutting tax will be considered as a manifesto pledge rather than a policy to be implemented next year.

One source told the paper: ‘It’s about being an aspirational country. You work hard, play hard and pass on your wealth. It’s a live discussion.’

‘Even though most people don’t pay inheritance tax, it polls incredibly well. It would be a totemic offer.’

Downing Street is holding talks about scrapping inheritance tax in a bid to win the next general election, sources have claimed

‘There is a conversation about making it a values issue,’ they added. ‘Labour will attack it and say it only benefits the wealthy.’

Rishi Sunak has discussed his desire to cut personal taxes and ministers have considered slashing income tax or national insurance by up to two per cent by the next election.

But there are fears an income tax cut, which could cost £13.7 billion a year, would be dwarfed by the impact of mortgage rate rises and inflation.

Halving inflation by the end of the year is one of the five key ambitions for the Prime Minister’s leadership and Jeremy Hunt has signalled this target will be prioritised over tax cuts.

The wider economic challenge facing the Chancellor and Prime Minister was illustrated by official figures showing the UK economy contracted in May.

The rate of inheritance tax is currently 40 per cent for estates worth more than £325,000, which is only charged on the portion that is above the threshold.

But estates of spouses and civil partners can pass on up to £1 million without any inheritance tax liability.

But halving inflation by the end of the year is one of the five key ambitions for the Prime Minister’s leadership and Jeremy Hunt has signalled this target will be prioritised over tax cuts

A No 10 source said: ‘The PM has repeatedly said that he wants to cut taxes for people.

‘As Conservatives that is obvious, we want people to keep more of their own money. But the current economic situation means that Government is completely focused on halving inflation – to help people have more in their pockets at the end of each month.

‘This kind of future-scoping speculation just isn’t on his mind at the moment and requires a different kind of economic environment to the one we are operating in.’

MailOnline has contacted No 10.

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