The election battle for your wallet

Voters will soon need to decide which party gets their vote. Adam Williams looks at their plans for taxes, property, pensions and investments

A general election is now less than six weeks away after Parliament agreed to take the country to the polls before Christmas. It may have been dubbed the “Brexit election” but, as the Conservative Party discovered in 2017, other issues can quickly take centre stage. Theresa May’s disastrous plans to revamp social care funding – cleverly branded the “dementia tax” by Labour – contributed to the Tories losing their majority. Parties have yet to unveil their manifestos but the key financial battlegrounds are already clear. Telegraph Money has looked at the prospects for income tax, stamp duty, inheritance tax, pensions and investments ahead of the Dec 12 vote.

Both the Conservatives and Labour have already made significant pledges on income tax. During his leadership campaign, Boris Johnson announced he would raise the threshold at which workers pay 40pc tax from £50,000 to £80,000. This would reduce the tax bills of four million people, according to A J Bell, a stockbroker.

Labour’s plans would see more people dragged into the top, 45pc, tax bracket. This is currently applied to those earning £150,000 or more but would be lowered to £80,000, with a new 50pc rate introduced for earnings above £123,000.

The Tories have steadily increased the personal tax allowance since 2010, helping lower earners, but have not made commitments beyond this tax year. At present, all workers pay no income tax until they earn £12,500 a year. Shadow chancellor John McDonnell had backed a report by the New Economics Foundation, a think tank, which suggested that the personal tax allowance be scrapped entirely. In its place would be a £48.08 weekly allowance paid to every adult earning less than £125,000 per year, paid on top of any existing benefits.

Green Party MP Caroline Lucas has also supported proposals for a “universal basic income” while the Liberal Democrats have previously mooted the idea of merging income, capital gains and dividend taxes, although this is not yet formal policy.

Income tax is devolved to Scotland, where the Scottish National Party has introduced 19pc and 21pc tax bands, alongside the existing 20pc rate, while increasing the higher rate to 41pc.

Inheritance tax (IHT) remains a big