Stamp duty and IHT on Tory hit list

Sunday 07 October 2007 00:00 BST
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As election fever mounts, the Tories have laid out radical plans to cut taxes.

First up, the Conservatives have pledged to raise the threshold for inheritance tax (IHT) from its current £300,000 to £1m, in effect exempting all but a few very large estates. The plan, announced at last week's party conference in Blackpool, will be paid for by imposing an annual charge on foreigners working in Britain who do not at present pay tax here – the so-called "non-domiciles". But in response, the Treasury questioned whether this move would generate anywhere near enough cash to pay for the raising of the IHT threshold.

First-time homebuyers could also benefit under a Conservative government. The shadow Chancellor, George Osborne, revealed plans to raise the starting threshold for stamp duty on property purchases from £125,000 to £250,000. This would, he argued, help up to 200,000 first-time buyers on to the property ladder.

However, other parties rubbished the tax-cutting plans, with Liberal Democrat Treasury spokesman Vince Cable branding them an "utterly feeble set of half-promises and un-funded commitments".

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