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An influential Liberal Democrat think tank will propose increasing the scope of inheritance tax (IHT) at the party conference next week, saying it had "become almost voluntary".
Currently, gifts made to family members more than seven years before the death of the donor are exempt from IHT.
However, Lord Newby, the Liberal Democrat Treasury spokesman, will say that time frame "no longer adequately reflects current life expectancies" and should be raised to at least 15 years.
The proposal is contained within Newby's report Tax and Coalition: Fairness and Responsibility?
IHT is now so easy to avoid it is seen as voluntary, Lord Newby said.
"[Current rules] no longer adequately reflect life expectancies. One of the main purposes of this rule was to allow parents to help their children in the early stages of their career.
"In many cases, parents are living into their 90s and beyond, so their children are often in late middle age when they inherit."
Newby added the time limit should first be set at 15 years before death, but could be extended further as life expectancy increases.
However, Carla Brown, senior solicitor at law firm Moore Blatch, said: "Most people who approach us for IHT planning have modest estates, are savers by nature and have been financially diligent.
"They have been net contributors to the country in taxes and want to remain financially independent until they die.
"With the prospect of ever increasing long-term care bills actively encouraging people to spend or give away money earlier because of swingeing IHT bills, this could mean the tax payer starts picking up the costs for people who would otherwise have been self-financing in their old age."
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| Comment | Lord Newby: Existing IHT limits make it 'almost voluntary' tax |
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Ghouls' Charter
My entire family, from a working-class background, has worked hard and saved diligently throughout life and has never sought help from the State. Our reward for this is to be robbed after death and to be seen by jealous and greedy eyes to be "rich" and by government as an easy target for robbery. I see no difference between the Lib Dems and the scumbags who robbed graves! It should be remembered that George Osborne's promise to raise the threshold to £1m was hugely well received and forced Brown to cancel a snap election! This means that many hard-working, modest families live under the threat of this immoral theft. Having suffered swingeing taxes throughout life, my death serves no good purpose except to finance further the pensions and perks of people who are better off than I am - such as government and top civil servants and MP's - and to indulge further the conceit that is "punching above our weight in the world" in the form of bloody and useless militaristic adventures. We are NOT "all in this together." I had NO debt, whatsoever! NONE! None of this debacle was of my making, any more than it was the doing of the poor and needy who are demonised and made to suffer so badly when the real perpetrators walk away unscathed! Why should I and others like me pay for it with the proceeds of our entire lives? I saved and went without so that my children and grandchildren would have a better life and a degree of security and comnfort in their old age and to help my grandchildren into university and beyond and to aid them in their lives' ambitions. Instead of benefitting them, I am to be robbed of my life savings in order to fund the reckless and feckless! To hell with you, Cable! I'd rather burn the bloody lot!!!
Posted by: Verity