The coalition’s tax trade-off

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.