Financial service provider James Hay yesterday commented on shadow chancellor George Osborne’s announcement that a Conservative government would raise the inheritance tax (IHT) threshold to £1 million from its current position at £300,000.
Liz Henderson of James Hay’s technical unit stated that the IHT, a tax which generates "relatively small" revenues for the government. is subject to "most debate" among consumers.
Ms Henderson stated that along with the abolition of stamp duty, such changes would be welcomed by homeowners – and cost the government some £3.5 billion, according to the Conservatives – but the ways of making up lost revenues would "cause more controversy than IHT itself".
Plans to implement a flat-rate offshore domicile levy on anyone registered as domiciled overseas for tax purposes are "unlikely to be as clear-cut" as they sound, Mr Henderson asserted.
Some individuals may have "considerable wealth overseas" while others will be reluctant to register as non-domicile due to the limited amount of tax savings they may benefit from, Ms Henderson concluded.
In his last budget as chancellor, Gordon Brown pledged to raise the IHT threshold to £350,000 by 2010.