The debate over whether or not a remove inheritance tax (IHT) and replace with some kind of mansion tax has been a staple of the Liberal Democrats manifesto for some time. However, it has been something that the coalition has found difficult to come to any agreement on, with the Conservatives wanting to raise the threshold of IHT to £1 million being a staple of their own beliefs. The stalemate may be set to change, with a new proposal from the Lib Democrats suggesting that perhaps there could be an exemption from IHT on valuable property if owners agree to pay more in council tax instead. The proposal is set to be discussed at the Liberal Democrats party conference this month.
IHT has often been heavily discussed and the Liberal Democrats are keen to overhaul and replace with some kind of mansion tax partly as a result of the fact that it can be easily legally avoided through careful tax planning and means such as pre-death gifts. Currently death duties and IHT raise over £3.2 billion a year.
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