Inheritance Tax : Clear Water Between Tories and LibDems

Have just read an article on LibDemVoice by Dick Newby, the Chairman of the LibDems Tax Policy Working Group. The Tories are promising “lower and greener taxes” and the LibDems are promising “fairer, simpler and greener” taxes. So far, so Tweedledum and Tweedledee. However one policy struck Guido as sharply different, the Tories are proposing to abolish death taxes on the reasonable grounds that they are unfair taxes on funds which have already been taxed. The LibDems are proposing to tinker with the threshold and toughen the rules on gifts.

If Guido understands the LibDem proposals correctly, the following example is correct:

His daughters finish university, by which time Guido is in his sixties, and he gives them each an (electric) car as a graduation present. He dies 14 years later (as expected by the actuaries), leaving his estate* to the girls. Under LibDem proposals they would be taxed on the cars and every birthday present given to them for the previous 15 years.

Does that strike you as fairer or mean-spirited?

*Assuming his estate is worth more than £500,000.

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