Inheritance tax rate set for huge cut in just months - and may soon be scrapped entirely
Rishi Sunak and Jeremy Hunt are eyeing up the move for next March
PA
Inheritance tax could be slashed as soon as next March in a bid by No10 to win the support of voters ahead of the next general election.
Prime Minister Rishi Sunak and Chancellor Jeremy Hunt are considering reducing the 40 per cent levy in the next Budget.
The cut would be a stepping stone in plans to eventually eradicate the tax entirely if the Conservatives are back in Downing Street after the next election.
At the moment, inheritance tax is paid on all estates worth more than £325,000, with an extra £175,000 available towards a main residence if it is passed to children or grandchildren.
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The allowance increased to £1million for a couple, meaning that the vast majority of people are unimpacted by the tax.
However, a senior Government source described the levy as "the most hated tax in Britain, according to the polls" to the Sunday Times.
"A lot of people don’t know that they won’t pay it," they added.
"People also feel it is just wrong to tax people on income that has already been taxed — and at a time when they are grieving."
The Conservatives currently trail Labour by as much 20 points in the polls, with the party eager to introduce policies likely to win back support.
There has been pressure within the Tory party to change or scrap inheritance tax, with former prime minister Liz Truss among those calling for it to be axed.
Earlier this week the Prime Minister announced he was ditching a number of net zero pledges.
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Jeremy Hunt is set to make the announcement in the Budget next March
PAHe is also thought to be considering scrapping the Birmingham to Manchester leg of HS2.
Labour has criticised the suggestion of ditching inheritance tax, claiming such a decision would be a "threat to the economy".
The party's shadow Treasury chief secretary, Darren Jones, said: “A year ago Liz Truss trashed the economy with unfunded tax cuts.
“Now Rishi Sunak is doing what Liz Truss wants.
“Abolishing inheritance tax – which 96 per cent of people never pay – is an unfunded tax cut of £7.2billion per year.
“The biggest threat to the economy is the Conservative Party.”
Jones has written to the Chancellor demanding answers on how any change might be paid for.