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Tories ‘could scrap inheritance tax’ to try and win the next election

Discussions are ongoing within Downing Street concerning the possible abolition of the inheritance tax in an attempt to secure victory in the upcoming general election, insiders suggest.

Senior figures within No 10 are deliberating the discontinuation of the tax, a measure that would have an estimated annual cost of around £7 billion. Despite this, supporters argue that such a move could assist the Conservatives in maintaining their ‘Blue Wall’ seats in southern England, as reported by The Times.

The proposal of reducing taxes is being contemplated as a potential manifesto commitment, not an immediate policy implementation.

A source disclosed to the Daily Mail, ‘The discussions revolve around the vision of an aspirational nation where one can work hard, enjoy life, and pass on accumulated wealth. It’s an ongoing debate.’

‘Even if most individuals are not subject to the inheritance tax, it’s popular in surveys. It would be seen as a symbolic gesture.’

‘There’s a discussion about framing it as a matter of values,’ they continued. ‘Labour is expected to counter by arguing that it solely benefits the affluent.’

Rishi Sunak has previously expressed a desire to reduce personal taxes, and the idea of cutting income tax or national insurance by up to two per cent by the time of the next election has been explored by ministers.

However, concerns are raised that the potential £13.7 billion annual cost of an income tax reduction could be overshadowed by the effects of mortgage rate increases and inflation.

An overriding goal of the Prime Minister’s leadership, as indicated by Jeremy Hunt, is to halve inflation by year’s end, and this objective is likely to take precedence over tax cuts.

The pressing economic dilemma confronting both the Chancellor and the Prime Minister was underscored by recent official data that revealed a contraction of the UK economy in May.

Currently, the inheritance tax stands at 40 per cent for estates valued over £325,000, with the charge only applicable to the portion exceeding the limit.

For spouses and civil partners, estates up to £1 million can be transferred without any inheritance tax liability.

A source from No 10 stated: ‘The Prime Minister has consistently expressed his intention to reduce taxes for citizens.

‘As Conservatives, that’s a given – we want individuals to retain more of their earnings. However, the current economic climate necessitates the Government’s full concentration on reducing inflation – to ensure people have more disposable income each month.

‘At this moment, such forward-thinking speculation isn’t a priority for him and demands a distinct economic climate from the one we are navigating through.’

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