No inheritance tax on homes worth less than £1m

Emma Haslett
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The chancellor is thought to be planning to include the measure in the Conservative manifesto (Source: Corbis)

No one will have to pay inheritance tax on properties worth less than £1m, under plans being drawn up by the chancellor.

Although the plans are unlikely to be announced as part of tomorrow's Budget, it's thought they'll be included in the Conservative manifesto.

According to an "insider" who spoke to the Sunday Express, options under consideration include raising the threshold from £325,000 - or abolishing the tax altogether for family homes. Documents seen by the Guardian also indicated George Osborne is considering reducing inheritance tax on properties worth up to £2m by £140,000.

It's the first of a series of Conservative manifesto pledges expected to be announced once campaigning begins in earnest following tomorrow's Budget.

Measures expected to be announced as part of tomorrow's decidedly voter-friendly Budget speech include a 20p hike to the minimum wage, raising the personal allowance and a huge investment in infrastructure.

Retailers will also benefit, with a major review of business rates.

The good news is that the chancellor is expected to unveil a stronger growth forecast, according to the EY Item Club, which uses the same forecasting model as the Office for Budget Responsibility (OBR).

The OBR "should upgrade its GDP forecasts for 2015 from 2.4 per cent to closer to three per cent", it said.

Martin Beck, the group's senior economic adviser, suggested the forecast will provide "plenty of cheer" for the Osborne.

In a world without political complications, the chancellor would be expected to take advantage of his fiscal wiggle room and announce some eye catching measures as he delivers his last Budget in this Parliament. However, political constraints mean that we can expect a caretaker Budget that keeps things ticking over, with most of the expected windfall banked until after the general election, when any big policy decisions will be made.

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