That being said, I cannot say that I like the way the inheritance tax is currently working. It is 40% on everything above the threshold (and despite what is said below was £285,000 earlier this year). I do not believe that ordinary secondary school teachers were ever the intended target of this tax, which is being driven by the astronomical increases in property prices in London
The chancellor, Alistair Darling, told Sky News that going back to the "tax and spend" instability that the Tories presided over "would be extremely bad for this country and people are right to be afraid of it".
And, speaking on Radio 4's Today programme ahead of the report launch, Mr Darling said: "Six per cent of estates pay inheritance tax. We have raised the threshold: it's £300,000. It will go up to £350,000." He said the review's findings showed the Conservatives had abandoned the political centre ground.
Canada does not have an inheritance tax
Some time after I posted this, I came across a much clearer explanation - also in the Guardian
The argument for abolition centres on the argument, which appears to be largely correct, that the super-rich don't pay. Only middle-income earners, who are ignorant of tax planning or unwilling to do the things necessary to avoid tax, end up paying.