The TaxPayers’ Alliance (TPA) has said that the duty is likely to start affecting more and more people and that the government needs to re-think the tax in its current form.
James Frayne, campaign director at the TPA, said: “We believe that currently six per cent of the state is affected by inheritance tax, but I think to be honest a lot more people will have to begin preparing for it. Many people’s houses are going to be dragged in as time goes on.”
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He added that inheritance tax faced a tough future for both the government and opposition parties as not much revenue is raised from it and it is generally unpopular with the public.
“In the meantime we could see if the pressure continues the threshold being raised and other taxes being hiked up to compensate. There is no upside for them to continue with this tax in its current form,” he said.
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Homeowners only have to begin paying inheritance tax at a certain point, with the current threshold being £285,000. This will rise to £300,000 for the tax year starting in April 2007.
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