Cameron to defend inheritance tax planning

David-Cameron-700x450.jpg

Prime Minister David Cameron will reportedly set out a robust defence of the right of parents to pass money to children today, after a weekend of pressure over his own finances.

Cameron published a statement of his tax affairs since 2010 yesterday, in a bid to draw a line under claims he had profited from investing in an offshore fund run by his late father.

However, he faced renewed criticism over a gift of £200,000 from his mother, which will be exempt from inheritance tax rules if she lives for seven years after the date of the gift.

According to the Telegraph, Cameron will make an urgent statement at the House of Commons today to “utterly” refute claims that the gift constituted tax avoidance, and launch a defence of parents giving their children lump sums without being hit by tax.

A source told the Telegraph the Prime Minister believes it is “completely standard, normal behaviour” for parents to wish to leave tax-free sums to their children.

Cameron was left £300,000 in inheritance following the death of his father in 2011, which fell below the IHT threshold. He received the money from his mother months later.

It comes after Labour leader Jeremy Corbyn suggested that there is an argument for reviewing inheritance tax.

Speaking about Cameron’s £200,000 gift on Sunday’s Andrew Marr show, Corbyn said: “That is within the rules, providing of course the person giving the money lives for more than seven years and obviously we hope she does.

“The issue is one that it does actually reduce the level of inheritance tax that is available for the Exchequer as a whole. Is there a case for looking at inheritance tax rules? Possibly.”

Opposition parties have also been keen to ramp up the arguments for further disclosure. Corbyn is preparing to unveil his own tax returns and the Scottish National Party’s Westminster leader Angus Robertson has called on the Government to publish the tax affairs of all Cabinet ministers.

Robertson said: “David Cameron has serious questions to answer and must provide full disclosure of his cabinet – how many government ministers have benefited from tax havens?

“For a government that says it opposes tax avoidance, it would be totally unacceptable for any of Cameron’s Cabinet to have pocketed themselves.”

Officials have hinted that Chancellor George Osborne may already be inclined to follow suit.

A Treasury source said: “We have been clear that the Chancellor has never had any offshore shareholdings or other interests.

“His income and interests are straightforward and declared publicly: his salary, rental income from a property in London and a shareholding in his father’s firm, Osborne and Little.

“He is always happy to consider ways to ‎offer even more transparency.”

Meanwhile, the Prime Minister is also expected to restate his commitment to corporate penalties for assisting tax evasion.

The Conservatives first unveiled the plans as part of their 2015 manifesto, in which they stated: “We are also making it a crime if companies fail to put in place measures to stop economic crime, such as tax evasion, in their organisations and making sure that the penalties are large enough to punish and deter.”

The FT reports that Cameron will today reiterate the plans, and pledge to put pressure on companies with “inadequate supervisory mechanisms”, as well any businesses that deliberately encourage evasion.