UK Chancellor Jeremy Hunt is facing a backlash from Tory MPs over his plans for a "stealth" Inheritance Tax raid on families.

He is poised to freeze the threshold above which people must pay death duties for another two years.

Mr Hunt will announce the move next week as part of moves to fill a £60billion black hole in the nation's finances.

Next Thursday's Budget is likely to be toughest seen in many years.

The chancellor is expected to unveil £35billion of spending cuts and £25billion of tax rises in a bid to balance the nation's finances.

And there is mounting concern in the North Sea oil and gas sector that it will be targeted for a sizeable chunk of the extra tax being raked in.

Controversial levy

The chancellor is believed to be preparing to unleash a second round of the controversial energy-profits levy on oil and gas producers.

It is understood that the additional tax on offshore operators could be raised from 25% to 30% and extended by three years to 2028. Officials have also been working on plans to widen the levy to include electricity generators.

The Telegraph says today that Inheritance Tax receipts have more than doubled in just over a decade from £2.3billion in 2009 to £6billion last year.

That is because average house prices have rocketed by 120% during that time, while the threshold for total assets passed on has remained at £325,000.

The latest freeze will raise an extra £1billion a year, analysis shows, and drag 10,000 more families into paying death duties.

Britain has the fifth-highest Inheritance Tax rate in the world at 40%, which is the same level as in the US.

Inheritance Tax rates

Only Japan, South Korea, Germany and France make people hand over more to the state on the death of a relative.

Tory MPs have warned Mr Hunt that it was the wrong time to be hiking taxes on households with the UK heading into a recession.

"Higher tax rates are a bad idea. We need to fight recession, back enterprise and promote wider ownership," said Sir John Redwood.

"We need to attract capital, risk-taking and investment, not tax it away," added the former head of No.10 policy under Margaret Thatcher.

Sir Iain Duncan Smith, a former Tory leader, agreed that now was "clearly not the time to pile further misery" on hard-working families.

"I don't believe he should be raising taxes just as we are going into a recession and with the highest tax base for 70 years," he said.

Against stealth taxes

David Davis, a former Brexit secretary, added: "I'm generally against stealth taxes because they're stealth taxes. There's a moral argument for lower taxes.

"I can quite understand what Jeremy Hunt is trying to do, and I support lots of it, but I hope we don't go too far the other way and exacerbate the recession."

When he was chancellor, Rishi Sunak agreed with Boris Johnson to freeze the Inheritance Tax threshold until April 2026.

Mr Hunt will announce in the Budget that is now being extended by a further two years until at least April 2028.

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