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British PM Cameron wants to cut inheritance tax

(Agencies) Updated: 2014-10-15 16:11

LONDON - British Prime Minister David Cameron said he wanted to cut inheritance tax so that it is only paid by the very rich, the Daily Telegraph reported on Wednesday.

Cameron, who faces an election in May next year that polls show is likely to be extremely close, said middle class families should not have to pay the tax and that he wanted to have an inheritance tax cut in the April 2015 budget, the paper said.

The tax is currently due at 40 percent on estates worth more than the 325,000 pound ($517,270) threshold, though there is an effective threshold of 650,000 pounds for married couples.

"To me, inheritance tax is a tax that should be paid by the very wealthy," Cameron was quoted by the paper as telling a meeting with pensioners.

"I would like to see that go further because I think, even at 650,000 pounds, particularly in some parts of the country, you see someone who has worked hard, they have put money into their house, they have done it to improve it and they want to leave it to their children."

At his Conservative Party's conference two weeks ago, Cameron promised more than 7 billion pounds of other tax cuts if he wins the election, although critics questioned how these could be funded alongside a vow to eliminate Britain's budget deficit.

Inheritance tax is unpopular in Britain as property price rises have made a greater proportion of people liable to pay it.

While in opposition, George Osborne, who is now finance minister, pledged in 2007 to raise the threshold to 1 million pounds, a step that may have helped convince then Prime Minister Gordon Brown not to call an early election.

Since gaining power in 2010, the Conservatives have not fulfilled their pledge.

"I have got to try and shoehorn these things into his budget. He is a cooperative chap, but I've got my work cut out on this one. But he is keen on it too," Cameron said of Osborne. (1 US dollar = 0.6283 British pound)

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