IHT -Tories help their own?

BobQ

The latest change to IHT proposed by the Tories damned by the IFS.A side from what you think of the principle of raising the IHT thresholds, it appears the IFS think it will further skew the housing market and limit housing opportunities.

Paul Johnson, the director of the IFS, told The World This Weekend on BBC Radio 4: “It is rather odd to give this special treatment to housing given that owner-occupied housing is already extremely tax privileged. This will only increase the bias we have towards putting your money in a house, to inflating potentially the value of housing, without dealing with the lack of housing, which is driving up the value of private residences.”

The document lists a number of problems with the policy for example the fact that it would encourage investment in owner-occupied housing rather than other more productive investments and discourage downsizing late in life when that might otherwise be appropriate.

http://election2015.ifs.org.uk/article/conservatives-proposed-cut-to-inheritance-tax-on-main-homes

Moto2

The policy is designed purely to stop some solid Tory voters wandering off to UKIP and has nothing at all to do with economics.

pjread

In fairness, at 150k it's not exactly aimed at the massively affluent. You'd struggle to find a run down 2 bed flat for that in much of the south. Mostly aimed at 'regular' pensioners really IMO.

princeofpounds

Personally, despite being a 'natural' conservative, I think it's the wrong policy.


Lower taxation is generally good (for the country as a whole, not just those benefitting), but this would have been about 1075th place on my list of priorities.


The IFS is absolutely right that it's already tax-privileged enough.


I am a big supporter of measures like raising the personal tax-free threshold instead. That directly make low-paid work pay, reduces the incentive for benefits, and cannot be misconstrued as helping the rich.


Maybe I should think about voting Lid Dem this time around, they probably need all the help they can get. Alas suspect they'll be swinging to the left after this election too.

chewmylegoff

Tories in "Tories announce policy designed to appeal to their core voters shocker".

What next? Labour promising to repeal the hated "bedroom tax" (which is only hated by their core voters).

The idea that it is somehow wrong for a political party having policies designed to benefit the people who support their party, which seems to be the thrust of the thread title, is bizarre. I assume the OP will be picking through the Labour and Lib Dem manifestos to flag up other disgraceful examples of this.

purch

princeofpounds wrote: »

Personally, despite being a 'natural' conservative, I think it's the wrong policy.

Wrong, and completely illogical.

chewmylegoff

princeofpounds wrote: »

Personally, despite being a 'natural' conservative, I think it's the wrong policy.


Lower taxation is generally good (for the country as a whole, not just those benefitting), but this would have been about 1075th place on my list of priorities.


The IFS is absolutely right that it's already tax-privileged enough.


I am a big supporter of measures like raising the personal tax-free threshold instead. That directly make low-paid work pay, reduces the incentive for benefits, and cannot be misconstrued as helping the rich.


Maybe I should think about voting Lid Dem this time around, they probably need all the help they can get. Alas suspect they'll be swinging to the left after this election too.

I expect the Tories are thinking about London marginals where they will be trying to win votes by saying that Labour are going to tax your house more whilst Conservative will tax it less or some bollox like that. Remains to be seen whether it does more harm than good for them...

cepheus

pjread wrote: »

In fairness, at 150k it's not exactly aimed at the massively affluent. You'd struggle to find a run down 2 bed flat for that in much of the south. Mostly aimed at 'regular' pensioners really IMO.

Where do you get the 150k from, that sounds like the limit of pension contributions? IHT is being raised to £1 million.

http://www.bbc.co.uk/news/election-2015-32271505

redux

chewmylegoff wrote: »

I expect the Tories are thinking about London marginals where they will be trying to win votes by saying that Labour are going to tax your house more whilst Conservative will tax it less or some bollox like that. Remains to be seen whether it does more harm than good for them...

Accepting that line of reasoning wouldn't be so logical.

Labour governments aren't averse to increasing the inheritance tax threshold, having done the last 12 increases.

fordcapri2000

There is a small part of me that can understand GO spin, but the issue I have with his "I just want things to be fair" mantra is that in 2015 the most overriding concern is not the put upon wealthy how want to save even more of their million/millions, it is the working men/women doing 50 hours work per week that cannot pay their bills.

If anything, this has now convinced me that these type of Tories are for the HAVES and the wealthy.

God, why did they not pick David Davies as PM

westernpromise

It deals with the grossly unfair situation whereby someone living in the north can inherit the house they grew up in whereas someone in an identical house in the south can't. The result is that people in the south are sentenced to a lifetime of huge mortgages and huge stamp duty because we have to compete for houses with the world's millionaires.

All property taxation should, in my view, be based on area divided by occupancy. Someone who grossly overhouses themselves in the north because houses are cheap should have that spare money taken away and redistributed to people in the south who are squeezed into houses far too small for their families.