IHT - draw the sting

Since Stephen Byers popped his head over the parapet to launch his ranging attack on Gordon Brown by suggesting that Inheritance tax should be scrapped, the usual supects have waxed vociferously, from la Toynbee to Chris, saying that IHt is a fair, redistributive tax and should be left alone.

As a conservative I disagree, seeing the 'cascade of wealth through the generations' as a noble aim in itself. However, the politics of scrapping IHT are tricky, since it can easily be presented as a tax cut for the rich. One major problem with IHT is that as house prices soar, more and more families are coming into the band liable to pay it. As in th past, the seriously rich can find ways around the tax altogether, leaving the only ones compelled to pay it those of middle income.

So, to draw the sting from the issue altogether, by solving the problem of fiscal drag, as well as the issue of one over-large asset, the Conservatives should propose to waive IHT on primary dwellings. This exemption is already in place for other taxes (CGT on sale for example) and would at a stroke take the majority of estates out of the band, without it being easy to slur it as a tax cut for the rich. Easy really.