CORBYN’S SLY DEATH TAX TRAP

1.2m more families’ homes to be hit by Labour’s inheritance rate

JEREMY Corbyn will drag an extra 1.2 million family homes into the grip of inheritance tax if he wins the election, new figures suggested last night.

In a move to target wealthier families, Labour will scrap Conservative plans to raise the inheritance tax threshold to £1 million by 2021.

Instead, the party confirmed it would reduce it from £850,000 to just £650,000 – a move which would slash the amount the middle classes can pass on to their children. The policy is not in the Labour manifesto, but appears in a separate costings document.

The 40 per cent inheritance tax rate is charged on the amount of the estate above the threshold, meaning that under Labour’s plans, children inheriting £850,000 from their parents would face an £80,000 ‘death tax’ bill.

Last night, the Conservatives unveiled research showing that an extra 1.2 million homes could be liable for the tax under Labour. The number would more than double from 725,000 under the Tory plan, to almost 2 million by 2021 under Mr Corbyn’s proposal.

The Tories say the Labour bombshell will be far more damaging to pensioners than Conservative plans to charge some people more for social care. They also claim Labour has secret plans to reduce the level even lower to £425,000 – a claim strongly denied by the party.

Last night housing minister Gavin Barwell said: ‘Millions of families who have worked hard and saved all their lives will see their homes dragged into Jeremy Corbyn’s punishing tax.’ The revelation came as:

The Tories lodged a furious complaint

to the BBC about anti-Tory bias over the selection of a TV debate audience described by Boris Johnson as ‘the most Left-wing ever’;

Labour confirmed it would rely on the SNP to put Mr Corbyn in power in the event of a hung parliament – and refused to rule out seeking support from Sinn Fein;

Theresa May questioned Mr Corbyn’s patriotism as she warned a successful Brexit could never be negotiated by a man who ‘doesn’t believe in Britain’;

It emerged that Mr Corbyn has backed squatters’ groups who issued guidance on how to break into buildings;

Mrs May and Mr Corbyn prepared to field questions from the public in a live Question Time debate tonight.

The Tories have already increased the inheritance tax threshold from £ 650,000, where it stood in 2015 when George Osborne’s Budget pledged to increase it gradually over the years. Under the Conservative policy, the level is set to increase to £1million by 2021.

Mr Corbyn has gone into the election saying he will reverse Mr Osborne’s changes, but the policy does not appear in the Labour manifesto – instead being relegated to the costings document.

In a list of tax measures, the costings document says it would be ‘reversing tax giveaways on capital gains tax, inheritance tax, bank levy and scrapping the married persons’ tax allowance’ to raise £3.7 billion.

It was only earlier this week that the party finally confirmed it would return the threshold to £650,000.

The Conservatives’ research is based on an analysis of one million Land Registry residential transactions in 2016.

It found an estimated 6 per cent of all homes in England and Wales are valued over £650,000. By comparison, 2 per cent of homes are valued over £1 million.

Taking inflation into account, the Tories estimate that by 2021, 7.7 per cent of homes will be worth more than £650,000; and 2.9 per cent more than £1 million.

It means that under Labour’s plans for a £650,000 threshold, about 1.93 million family homes will be caught, more than 1.2 million more than under the Tories’ plans for a £1 million threshold.

And the Conservatives are arguing that Labour want to go further, and reduce the threshold to £425,000. They say this is because both Mr Corbyn and Shadow Chancellor John McDonnell have previously opposed the right of couples to pay their inheritance tax allowance on to their spouse on death.

The Tory analysis finds that if the threshold is reduced to £425,000, 15.3 per cent of all homes would currently be hit – equivalent to 3.9 million homes in England and Wales.

Allowing for house price inflation, this would rise to 19.4 per cent of all homes by 2022, equivalent to 4.9 million homes.

Mr Barwell said: ‘ Jeremy Corbyn’s manifesto contains a £ 58 billion black hole and Labour will attempt to fill it using damaging taxes on family homes.’

‘Corbyn and John McDonnell have made clear they want even more properties to become liable for inheritance tax if they win power.

‘Under their chaotic plans, one in five homes across the country would be swept up in Labour’s family homes tax.’

Labour denied this – saying it planned only to reverse the threshold to £650,000. The shock analysis comes a day after the Mail revealed that Mr Corbyn was considering a ‘wealth tax’ to pay for social care. On Wednesday, economists said this suggested people would have to pay a Frenchstyle annual tax on their investments, such as property.

This is on top of Labour’s manifesto commitment to hit those earning £80,000 or more with higher income tax.

And earlier this week it emerged that council tax bills would treble under Labour plans for a ‘garden tax’.

The small print of Mr Corbyn’s manifesto contains proposals to replace council tax and business rates with a land value tax on homes and gardens.

Last night, a Labour spokesman said: ‘The only figure for the number of estates that will have no inheritance tax liability as a result of these changes is the one that the Government gave when they first announced this policy: 26,000 in 2020-21. This contrasts with the millions of pensioners whose homes may be under threat as a result of the Tories’ dementia tax.’