Henry Smith, Conservative Parliamentary Candidate for Crawley, has welcomed the Prime Minister’s announcement that a future Conservative Government would take the family home out of inheritance tax.

The Prime Minster has committed to introducing a new allowance into the tax system, which will effectively increase the Inheritance Tax threshold to £1 million for married couples, meaning only the very rich would pay inheritance tax. This will be paid for by increasing taxes on very wealthy people’s pensions.

Henry commented;

“Crawley families who have saved and put their hard-earned money into their home shouldn’t have to pay inheritance tax when they pass it on to their children.

“That’s why this new allowance is good news for people who have worked hard, saved and want to pass on their home to their children.

“It will effectively increase the Inheritance Tax threshold to £1 million for married couples, taking the family home out of inheritance tax in Crawley.

“This Government has already cut income tax for basic rates taxpayers by £825, and the Conservative Party is committed to increasing the tax-free personal allowance to £12,500 in the next Parliament.

“Since 2010, we have seen Crawley unemployment down by more than 60%. 25 million people across the country have seen their income tax bill fall – 3 million people have been taken out of tax altogether.

“Our country has a choice between the class war of Ed Miliband, or a future of aspiration put forward by the Conservatives.”

Notes to Editors

People who aren’t rich pay Inheritance Tax on the family home.

• Almost a quarter of houses owned by individuals qualify for Inheritance Tax because they are worth more than the £325,000 threshold.  Inheritance Tax was never designed to catch these people who have worked hard, saved and want to pass on their family home to their children.

£1 million Inheritance Tax-free allowance for married couples.

• We will increase the maximum Inheritance Tax allowance for married couples from £650,000 to £1 million by introducing a new £175,000 per person transferable allowance for people’s main residence when it is passed on to their children or grandchildren.
• This will increase the maximum tax-free allowance for an individual from £325,000 to £500,000. Like the existing tax-free allowance, the new ‘family home allowance’ will be transferable between married couples and civil partners, so the maximum tax-free allowance for married couples will be increased from £650,000 to £1 million.
• The new ‘family home allowance’ will be tapered away if people leave behind assets worth more than £2 million. For every extra £1 above £2 million the allowance will be reduced by 50p, so that it will be withdrawn entirely above £2.35 million. Those leaving behind more than this amount will be entirely unaffected by the new allowance.
• We will consult on how the value of the allowance can be preserved for people who sell their house in order to pay for care.

This will be come into effect in April 2017.

• The full amount can be transferred even if one member of a married couple has died before the policy comes into effect and will benefit existing widows and widowers.

This will be paid for by reducing the tax relief on pension contributions for people earning more than £150,000.

• The size of the Annual Allowance will be gradually reduced from £40,000 to £10,000 at incomes over £150,000. The annual allowance will be reduced by 50p for every £1 of income above £150,000, reaching £10,000 at incomes above £210,000. Pension contributions above the annual allowance are taxed at people’s marginal rate of income tax, which for those earning above £150,000 is 45 per cent.