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Local estate agents Aston Mead have called upon the Prime Minister to make good his ambition to increase the inheritance tax threshold to £1m in next week’s Budget.

Plans to raise the threshold were included in the Conservative manifesto before the 2010 election, but failure to reach an outright majority meant the proposals did not make it into the Coalition agreement. However, in a speech last October, David Cameron repeated his intention to “shoehorn” the move into his final Budget before the General Election.

Aston Mead Managing Director Charles Hesse said: “Families should be able to pass a family home on to their children tax-free. As many people as possible should be spared the 40 per cent death tax on houses where many of them have lived for many years. Raising the limit to £1m would mean that their children would benefit, rather than the taxman.”

The current threshold stands at £325,000 – although the last Government allowed the figure to be passed between husband and wife, so the effective threshold is now £650,000. Wednesday’s Budget announcement could see the allowance raised as early as next month, when the new tax year begins, although it could take longer.

The Government's forecaster, the Office for Budget Responsibility, has said the proportion of estates attracting inheritance tax would double within the next four years from one in 20 today to almost one in 10.

Charles Hesse added: “The existing allowance is simply inadequate here in the South East, where house prices have increased substantially. Properties in Surrey and Berkshire typically cost more than the threshold at which the 40 per cent tax charge is triggered.

“The Chancellor, George Osborne, declared his plans to raise the inheritance tax threshold to £1m as long ago as 2007. Nearly eight years later, it’s time to turn those plans into reality.”

 
 

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