If the Conservatives win the next general election, inheritance tax and capital gains tax could be scrapped.
The Shadow Chancellor, Oliver Letwin has stated that he was not adverse to abolishing the two taxes altogether. He said: "'Inheritance tax is increasingly a tax on the homes of ordinary families. It is unfair to impose a high marginal rate of tax upon families who live in parts of the country where property is expensive".
The Shadow Chancellor's ideas for inheritance tax are raising the threshold of £263,000 or linking the threshold to house prices and lowering the 40% tax rate. Plans for capital gains tax are dropping the tax, having a 10% flat rate on all assets or introducing a 10% flat rate on all assets held for over two years.
Our view
This is the ultimate spin. Remember that we are heading towards monetary union with the EU and most States have some form of Capital and Inheritance taxes. We see little scope for abolishing these taxes unless we want to close a few hospitals to save money!