Tories promise cut in inheritance tax

David Cameron has promised to end inheritance tax on properties worth up to £1m as the Conservative party on Sunday sought to fire up its election campaign with a pitch to "middle Britain".

The prime minister said the manifesto pledge to increase the threshold to seven figures from April 2017 would take family homes out of the tax.

The Conservatives will pay for the measure by imposing higher taxes on pension savings of those earning more than £150,000 a year.

"This is a tax that is meant to be paid for by the rich, not by hard-working families who have saved to buy a home and improve it," the prime minister told the Sunday Times. "That wish to pass something on is about the most human and natural instinct there is."

The announcement comes as all three parties prepare to publish their manifestos this week, with the Conservatives and Labour still deadlocked in the polls.

Mr Cameron's appeal comes amid growing concern within the Conservative camp over its national strategy after a week of aggressive campaigning failed to break the deadlock between the two main parties.

"At this moment, momentum is shifting towards Miliband," one senior Conservative MP told the Financial Times ahead of the announcement. "We shouldn't be spending time running the opposition down, we should be selling the benefits of a future Conservative government."

The prime minister on Sunday admitted he needed to bring more "sunshine" to the campaign and offer a more positive vision of Britain if re-elected as prime minister on May 7.

The pledge revives a previous Conservative promise from the 2010 election, which has been blocked in coalition by the Liberal Democrats.

Senior strategists hope the policy will attract UK Independence Party defectors back to the Conservative fold and appeal to floating voters: a post-Budget poll by YouGov found inheritance tax topped the polls as the most unfair tax across voters from all parties.

Labour on Sunday described the proposal as "a panic move" which would bring a tax cut of £140,000 to people owning £2m homes at a time when working people are shelling out more in proportion. The Lib Dems said the scheme was a sign of "desperation" for the Conservatives.

Under the scheme, the individual tax-free allowance will be raised from £325,000 to £500,000 when a property is included, giving a married couple a shared £1m tax-free allowance.

Separately on Sunday, Labour sought to build on its pledge last week to end "non-dom" status, announcing a 10-point plan to claw back some of the £7.5bn a year lost through tax avoidance and evasion.

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