Tories pledge to review 'unfair' inheritance tax

The Conservative Party is "examining the future of Inheritance Tax", and has said it would reduce death duties if the party gained power after the general election next Spring.

The possibility of raising the threshold for the tax from the current £263,000 ceiling is being considered by shadow ministers during a wide ranging review of policy in preparation for next month's Conservative conference.

Senior Tories said that "thousands of hard-working families are now being swept into the inheritance tax net" because of Labour's failure to raise the threshold, and many of the 1.5 million council houses – purchased under the Thatcherite ‘right to buy' scheme – have been "falling into the tax trap".

In 1997, only Gerrards Cross in Buckinghamshire had an average house price above the inheritance tax threshold. Now there are 86 towns in that category – and the list is still growing, with a million houses becoming potentially liable to inheritance tax in the past two years, the Tories claimed.

Despite refusing to give tax cutting commitments, Shadow Chancellor Oliver Letwin said that the inheritance tax system had become "plain unfair".

"Once only the very rich paid it, but under Gordon Brown it is hitting ordinary families all over Britain," he said.

"Two and a half million houses with six million people living in them are potentially liable to inheritance tax and the number is rising rapidly. Even former council houses are being drawn into the net. This problem needs to be remedied."

However, Shadow Treasury Minister George Osborne said it would be "irresponsible" to give a commitment to cutting the tax.

"When we have done our sums, when we have seen what Gordon Brown has left us in terms of the state of the economy, then we will see what can be done. But people should be in no doubt that we want to cut taxes," he said.

(gmcg/mb)