The truth behind David Cameron’s new inheritance tax policy

David Cameron’s new Inheritance tax policy is clearly an important political message of aspiration and family values rather than a policy that will either help many or actually have much fiscal impact. The OBR has numbers on death rates and estates subject to the tax: just under 600,000 people died in 2013/14 and only 5 per cent of those had estates that were liable to inheritance tax. So that is just over 26,000 deaths in one year whose estates paid inheritance tax.

According to the Telegraph, Cameron’s policy would only begin in 2017, two years into the next parliament. So three years of this policy and on 2013/14 rates this will only effect about 80,000 estates. On the face of it not a huge vote winner then.

And of course it relies on Cameron getting into power with either a majority or a coalition partner willing to agree to it. The Lib Dems have not allowed the Tories to raise the inheritance tax threshold in this parliament and it has been stuck at £325,000 for six years.