Tory inheritance tax plan is 'special treatment for property owners'

By Lenore Rice

The Conservatives have announced that they would introduce a new zero-rate band of £175,000 on a main property involved in an estate for inheritance tax purposes.

Essentially, the threshold at which inheritance tax is payable would remain at £325,000, but if a property is involved it would rise to £500,000 for each individual, and to £1million for couples who are married or in a civil relationship, as they are able to transfer the rate. However, the Institute for Fiscal Studies has criticised the reforms, saying they disproportionately benefit richer people, and amount to a "rather odd" special treatment for property owners.

The director of the IFS, Paul Johnson, questioned why the inheritance tax reforms singled out property owners, when "owner-occupied housing is already extremely tax privileged". He considers that the proposed changes could potentially inflate house prices.

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