Gordon Brown - possible rethink on inheritance tax

Prime Minister Gordon Brown has hinted that inheritance tax should be set at the ‘fairest rate’ and he is to assess the situation again in the next few weeks.

In an interview recently, the Prime Minister said that everybody wants inheritance tax, the Conservatives even want it to stay. The question is what is the fairest rate at which it’s charged and what is the exemption level for people in the future?

Under Labour’s current plans, the inheritance tax threshold is £300,000 and will increase to £350,000 by 2010. However, at last week’s Tory party conference, the Tories pledged that only those with assets of £1 million and over would be caught by the tax under a Conservative Government.

The Conservative party also promised to abolish stamp duty for 90% of first-time buyers by increasing the threshold for first-time buyers to £250,000.

It is expected that the Chancellor, Alistair Darling, is to paint a gloomy picture of the economy in his joint pre-Budget Report and Comprehensive Spending Review statement today.

Mr Darling is to reveal an additional £1.4 billion a year for the health service. Some of the money will pay for Labour’s pledges on GPs’ opening hours and MRSA screening. It is expected that education will receive an extra £3.5 billion a year – an increase of 2.4% above inflation.

Finally, it is probable that Mr Darling will target cars and airlines for further ‘green taxes’. Furthermore, taxes on alcohol could also increase in accordance with the Prime Minister’s aim to crack down on binge drinking.

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