Coffee House

The coalition’s tax trade-off

19 September 2012

10:45 AM

19 September 2012

10:45 AM

James Kirkup has an intriguing story today about how the Liberal Democrats are prepared to see inheritance tax scrapped, or the threshold raised, in exchange for the introduction of higher council tax bands. This suggests a way in which the Liberal Democrats could claim to have got a ‘mansion tax’ while the Tories could say they had made progress on their commitment to raise the inheritance tax threshold to a million pounds.

In the run up to the Budget, the Chancellor was prepared to accept higher council tax bands in exchange for scrapping the 50p rate. However, the Prime Minister and the local government secretary Eric Pickles were both opposed to the idea.

I understand that the DCLG remains highly sceptical of any changes to council tax. I doubt that they’ll be biting on this bait. But what Cameron’s position on it is remains to be seen.

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Show comments
  • Charlie the Chump

    Lower spending + lower taxes = GROWTH. Now get on with it.

  • Jebediah

    In addition the Tories would be nuts, anything remotely close to a mansion tax punishes the very part of the country that normally votes Conservative. It’s electorally nuts. Cut benefit instead.

  • Jebediah

    Tell the Lib Dems to go to hell. They are a junior partner and do not negotiate equally. If they want to run the risk of election, let them. We don’t undertax in Britian, we overspend.

  • 2trueblue

    We have already had the new levels of stamp duty put in place which is relevant to what you pay and not difficult to apply. I think introducing a mansion tax smells of envy, and sends the wrong message. I do not believe the LibDums will do away with inheritance tax……. unless of course MP’s are worried about their own situation. I think raising the threshold is right.
    Council tax levels are also wrong as they should be in line with ability to pay, rather like the system in the states where you pay a portion of what you pay in local taxes as a percentage of your income tax.

  • Acacia Avenue

    Okay, so the Tories are going to open the flood gates to a new tax on housing, is that right? Once the Lib Dems get their £2m ‘mansion’ tax Vince Cable can then drop it down to his preferred level of £1m and then Balls can Brown it down again and again…. Only the supremely rich live in £500k houses… £400k… £300k….
    Inheritance Tax is a silly trade-off, if that is the cunning plan. Many of us out here hope Acacia Avenue will feed our old age – ie keep us alive. With the way things are there will be little left of our assets to tax after most of us have died so why … oh I get it.

  • monty61

    Whose kite are you flying here James?