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Inheritance tax

Following his article in today’s Sunday Telegraph calling for the abolition of inheritance tax former Cabinet Minister Stephen Byers this morning stressed the electoral importance of taking action in the light of the rapidly rising number of people being hit by inheritance tax. He said:

“Soaring house prices have led to over one and a half million homes now being valued in excess of the threshold for inheritance tax liability. There is no doubt that without a change in policy this will increase further by the time of the next election.
The landed gentry and super rich can organise their affairs so that quite legally they can avoid liability. This is not an option if your only asset of any real worth is the family home. Inheritance tax was never intended to hit these people but nowadays it is. People who were never higher rate taxpayers in life are now become liable to pay 40% inheritance tax on death.”

Many of the homes becoming liable for inheritance tax for the first time are in those key marginal constituencies that will form the electoral battleground in the future. These are the seats that will decide defeat or victory at the next general election.

Examples of Inheritance Tax Impact

In London the average house prices in Wandsworth (which covers Parliamentary seat Battersea – Labour majority just 163) is £398,714.
In Islington (Islington South and Finsbury – Labour majority 484) average house price £407,999.
In Barnet (covers Finchley and Golders Green – Labour majority 741) average house price £368,237.
In Harrow (covers Harrow West – Labour majority 2028) average house price £289,486.
All average prices above the present tax threshold for inheritance tax of £285,000.

The following are examples taken from the rightmove.com website of properties on the market in key marginals of Crawley (Labour majority 37); Harlow (Labour majority 97); Hove (Labour majority 420) and Swindon (Swindon South Labour majority 1353: Swindon North Labour majority 2571).

Swindon
£310,000 – 3 bedroom terraced property
Goddard Avenue, Old Town, Swindon
End Terraced

Harlow
£315,000 – 3 bedroom terraced property
The Chase, Newhall, Harlow, Essex
Townhouse with garage

Crawley
£375,000 – 3 bedroom detached property
Ifield Green
Private road and garage

Hove
£395,000 – 3 bedroom semi-detached property
Leicester Villas, Hove, BN3
Medium sized garden, popular area.