Sam Dunn: Here's my advice to help Gordon move to No 10

Everyone has a personal wish list. At the risk of sounding like my father, my own includes the resurrection of non-military National Service and draconian limits on the time we spend watching television.

Everyone has a personal wish list. At the risk of sounding like my father, my own includes the resurrection of non-military National Service and draconian limits on the time we spend watching television.

However, in today's 24/7 disposable trash culture, I'm aware these wishes make me sound very old before my time and that I live in faint hope of their coming true.

Yet there's one item on my wish list that's more realistic than the others, and more likely to be shared by other people: a revamp of stamp duty rules for first-time buyers.

With a Budget just 10 days away and a general election looming, MPs, mortgage lenders and industry bodies are clamouring for the threshold at which tax of 1 per cent is payable on a house purchase to be lifted from £60,000 to £150,000.

This would cut the cost of buying the average first home by around £1,300 and free up cash to pay for other expenses such as surveys, valuations or legal fees - particularly for those on lower incomes.

The threshold has been in place since 1993 and is ripe for review, especially since house price inflation has soared by 160 per cent in that time.

Accountants have crunched the numbers and reckon Gordon Brown can easily afford such a tweak by introducing new stamp-duty rates higher up the property ladder. But there are no signs that the Chancellor is preparing to budge.

Many inside the industry think that pleas on behalf of hard-pressed first-time buyers will fall on arid ground. Mr Brown has already made it clear, they say, that the way ahead lies with plans unveiled a month ago to build more social housing across the UK.

Yet the populist appeal of such a tax change is obvious. Given his well-publicised desire for the top job in government, a shift of policy on stamp duty by Mr Brown could be a real crowd-pleaser and a shrewd career move.

The Budget also offers a second opportunity for Mr Brown to fulfil a desire likely to be even higher on voters' wish lists. Again, this involves property.

The inheritance tax (IHT) net has caught millions of middle-income families during the past decade as house prices have rocketed. Forty per cent tax must be paid on any estate over a £263,000 threshold, and the property price surge in recent years has catapulted ever more people into this bracket. Some 2.4 million homeowners now face potential IHT bills, according to recent calculations by the Halifax, and the Treasury is set to rake in estimated revenues of nearly £3bn in this tax year alone.

The tax is unpopular with both older homeowners, seeking to pass on their property intact, and their children who stand to benefit. By raising the bar at which IHT is currently levied, Mr Brown would exempt many who, apart from their property, would otherwise have very little to leave their loved ones.

The threshold could be raised to £300,000, say. To pay for it, a 20 per cent tax could be imposed on estates worth between £300,001 and £500,000, rising to 40 per cent up to £1.5m, and 50 per cent on estates above this level. The accountancy firm MacIntyre Hudson sees this as a key change Mr Brown might want to introduce in the Budget.

I can't help feeling, however, that although it would be another popular measure, Mr Brown will pass up the chance to make immediate changes, and opt for a government-sponsored IHT consultation period instead.

Any hint of reform of stamp duty and IHT will be more than welcome; and if the Chancellor mentions National Service as well, he might even win my vote.

s.dunn@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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