There are approximately 2,000 new unclaimed estates occurring every year. Last year alone the treasury absorbed £43 million from these estates. The majority of this revenue comes from the values of the properties on the estates and the proposal of this so-called 'Mansion Tax' would target higher value properties involved if there is a successful claim made by a beneficiary.
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This tax will therefore have implications for companies that offer heir-hunting services; connecting relatives to their lost inheritance. Many of these services are already recalculating the value of the properties involved in case the tax becomes live. It is not clear exactly how the tax will be implemented but it will target homes with a value in excess of £2 million.
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There are strong indicators that the proposals may form part of a deal on policy between the Lib Dems and the Tories as both parties draw up a raft of new policies. Following their initial austerity measures the government is now keen on ensuring new strategic 'vote-winning' manifestoes are put in place to try and strengthen their position before the general election of 2015.
Officials from the Lib Dems have also drawn up proposals for an exemption from inheritance tax for homes where the owners have agreed to pay an increased amount of council tax. These proposals, alongside that for the 'Mansion Tax' are due to be discussed at the forthcoming Lib Dem party conference and will form a core part of Nick Clegg's party's policy for taxes on wealth.
Although the Tories have repeatedly rejected the idea for a tax on the most valuable houses it is believed that a deal may be being brokered with Lib Dems offering an exemption from death duties as part of the plan.
Inheritance tax (IHT) has been an issue with the Lib Dems for some time, with many in the party believing this tax to be excessive and unfair. They have called for IHT to be significantly overhauled or scrapped altogether. It is unlikely that the Tories will give up ground on Inheritance Tax as it is the single most profitable tax for the government; raising a considerable £3.2 billion a year for the Treasury.
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