The Government is considering axing inheritance in three months in a bid to attract more votes share ahead of a General Election.
Prime Minister Rishi Sunak is reportedly looking at scrapping the levy as part of a ‘gear change’ on tax policies before voters go to the polls, according to The Telegraph.
He is also said to be considering reducing the income tax threshold and lowering the basic tax rate tax 20 per cent.
Cutting taxes could help win over voters ahead of the next general election, which Mr Sunak confirmed this month will be held in 2024.
The Conservatives have failed to get within touching distance of Sir Keir’s party in the polls recently, with the latest survey by pollster Redfield & Wilton putting Labour 18 points ahead.
Prime Minister Rishi Sunak is reportedly looking at scrapping the levy as part of a ‘gear change’ on tax policies before voters go to the polls
He is also said to be considering reducing the income tax threshold and lowering the basic tax rate tax 20 per cent (Stock image)
Jeremy Hunt shelved plans to slash inheritance tax in the Autumn Statement last month.
The Chancellor had been considering whether to halve the 40 per cent rate of the hated duty – also known as ‘the death tax’.
The levy has been called the most hated tax in Britain, even though only 4 per cent of people are subject to it.
But thanks to rising house prices and a greater desire to transfer wealth between generations, more people are being dragged into its orbit.
Economic forecasters at the Institute for Fiscal Studies say that up 12 per cent could be paying it within a decade.
The levy is charged at 40 per cent for estates worth more than £325,000, with an extra £175,000 allowance towards a main residence if it is passed to children or grandchildren.
Couples can combine their allowance, allowing transfers of up to £1 million tax-free.
Abolishing inheritance tax would cost about £7 billion a year, but cutting income tax by 2p in the pound would cost £13.7 billion a year. Such changes will be at the forefront on Mr Sunak’s mind as he plans for a 2024 election.
Jeremy Hunt (pictured) shelved plans to slash inheritance tax in the Autumn Statement last month
Officials had expected Mr Sunak to wait until the last moment before calling an election to give his party as much time as possible to turn the polls around.
But a National Insurance cut set to come into force next month, followed by further tax cuts expected in the spring Budget, could give enough momentum to the Tories to spur the Prime Minister into calling a May election.
Mr Sunak may also want to avoid the humiliation of potentially losing hundreds of seats at the local elections, which are scheduled to take place on May 2.
Last night sources also confirmed that senior Labour MPs have now been put on an election footing if the Prime Minister decides to act early.
Shadow ministers have been told to have their policy proposals ready by mid-January so that the party can have a full manifesto by February 8, insiders have said.
Several meetings have taken place in recent weeks between Shadow Cabinet members and their senior advisers to discuss the manifesto, according to The Guardian.
Sir Keir Starmer is expected to tour the UK between January and March to highlight each of Labour’s five ‘missions’ or electoral pledges to the public.