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IHT threshold doubles

The Chancellor’s first Pre-Budget Report has said that inheritance tax threshold for couples will rise to from £300,000 to £600,000 from today and then to £700,000 by 2010, in answer to the Conservative pledge to raise the threshold to £1m at their party conference last week. Mr Darling also predicted that UK economic growth is expected to be between 2% and 2.5% next year and 2.5% to 3% for 2009/2010.

Mr Darling also said that loopholes for non-domiciled tax payers are to be considered following plans set out by the Conservative party last week: Mr Darling said Conservative plans to charge a flat rate of £25,000 to non-doms would mean only 15,000 paying, which would raise £650m a year, not the £3.5bn which was claimed by the Shadow Chancellor George Osborne. Under Labour, Mr Darling said that non-domicile taxpayers will face a charge after seven years and tax after ten in plans to be finalised and which would also raise £650m.

Mr Darling also stated that the budget for Defra budget will rise to £4bn in three years’ time, including £800m by 2010 for flood defences.

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