(Reuters) - British Prime Minister David Cameron hinted the inheritance tax threshold might be raised in April so only the "mega rich" pay taxes on inherited property, the Telegraph reported on Tuesday, citing his comments at a charity event.
"Inheritance tax should (only) be paid by the very wealthy, and I think you should be able to pass a family home on to your children rather than leave it to the taxman," the Telegraph quoted Cameron as saying at an event organised by Age UK in London.
"The last government allowed you to pass it between husband and wife, so the effective threshold was 650,000 pounds ($1.03 million), but I have got ambitions and would like to see that go further."
Cameron said he wanted to include the tax in his new budget, expected in March, which means the allowance could be raised as early as April when the new financial year begins, the telegraph reported.
The Prime Minister also said the allowance was insufficient in some parts of the country where property prices had soared. Properties in London and the South East typically cost more than the threshold at which 40 percent tax charge is triggered. Official figures show the average price in London is now 514,000 pounds, while it has reached 338,000 pounds in the South East.
The inheritance tax is levied at 40 percent on the value of an estate above the 325,000 pounds threshold, or 650,000 pounds for a married couple.
The Conservative Party pledged to raise the threshold to 1 million pounds in the last election, but could not fulfil the promise because they could not secure an outright majority.
(1 US dollar = 0.6293 British pound)
(Reporting by Ankush Sharma in Bangalore. Editing by Andre Grenon)