The Conservatives are stated to be discussing scrapping inheritance tax in a bid to win over voters on the subsequent election.

What is the tax, how a lot do folks pay - and who're the Tories hoping to win over in the event that they axe it?

What is inheritance tax?

Inheritance tax is paid on cash, property and possessions anyone leaves behind after they die.

These issues of worth are often known as the particular person's property.

Inheritance tax is not paid on the entire property. If an individual's property is value lower than £325,000, there is no inheritance tax to pay.

If it is value greater than that, inheritance tax applies and all the pieces above that threshold will probably be taxed 40% (however you continue to get the primary £325,000 tax-free).

However, there are some cases the place the edge adjustments.

Married {couples}

If you might be married or in a civil partnership, you possibly can cross on a house to your partner with out paying inheritance tax.

The surviving accomplice additionally inherits what's left of the late accomplice's tax-free threshold.

If the primary partner to die didn't use any of their threshold, the surviving particular person will be capable to depart £650,000 with none tax being paid on it.

Leaving a house to a baby or grandchild

If you give away your house to your youngsters - together with adopted, foster or stepchildren - or grandchildren, the inheritance tax threshold rises to £500,000.

Are there every other loopholes?

If you allow all the pieces above your tax-free threshold to a charity or a neighborhood newbie sports membership, it will not be topic to inheritance tax.

What about cash given away earlier than you die?

Money given away in your lifetime is usually nonetheless thought-about a part of your property, except you survive for seven years after giving it.

However, you can provide away as much as £3,000 a yr earlier than you die and it is not thought-about a part of your property, so is not answerable for tax.

You also can give away funds of as much as £250 per particular person every tax yr and they're excluded from inheritance tax.

Wedding presents are one other approach to give away cash tax-free. You can provide £5,000 to a baby, £2,500 to a grandchild and £1,000 to anybody else with out worrying about inheritance tax.

Does everybody pay inheritance tax?

No. Inheritance tax is just paid on estates that attain the thresholds laid out above.

According to the HMRC, that is just one in 20 estates.

The Treasury stated greater than 93% of estates are forecast to have zero inheritance tax legal responsibility within the coming years.

How a lot cash is raised by inheritance tax?

About £7bn is raised every year by inheritance tax. This cash is spent on public providers.

What are the Conservative Party's plans for inheritance tax?

Conservatives are reportedly discussing scrapping inheritance tax.

But Number 10 has indicated it's not a right away precedence.

It's "future-scoping speculation", Number 10 advised Sky News, and "requires a different kind of economic environment to the one we're operating in".

It may very well be thought-about a manifesto pledge moderately than a coverage to be carried out subsequent yr.

Why would the Tories wish to axe inheritance tax?

The Conservatives are trailing Labour in opinion polls and are looking out for methods to shore up votes.

As Sky News' chief political correspondent Jon Craig explains: "This is one - potentially - for the manifesto, in a bid to win back those disgruntled Tory voters in the shires and the so-called 'blue wall'."

Content Source: information.sky.com