Shadow Chancellor John McDonnell has describing reforms to inheritance tax as "interesting" (Image: GETTY)
Under the plans supported by Shadow Chancellor John McDonnell, inheritance tax would be replaced by “lifetime gifts tax”. The current scheme has a threshold of £475,000 0r £950,000 for couples, only 640,000 households of the 27.2million households in the UK pay the tax each year. As reported by MailOnline, everything a child receives from their parents during life and death above £125,000 would be taxed.
The threshold would be set for each child, so two children could inherit an estate worth £250,000 tax-free.
Anything above the threshold would be taxed annually at income tax rates.
The Tories have claimed this plan could affect 10 million households according to Land Registry Data.
Mr McDonnell told Sky News: “We are looking at it and it might be one of those ideas, and we’re consulting on it at the moment.
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Labour have spent the last nine years in opposition (Image: GETTY)
"I think it’s interesting. We need to have a fairer system of how we can ensure that wealth is more fairly distributed, that’s one idea and we are listening to a whole range of ideas.”
Mr McDonnell ruled out another