Chancellor Jeremy Hunt is reportedly planning a stealth raid on inheritance tax in the Autumn Statement as part of the government’s attempt to raise about £54bn through tax rises and spending cuts to fill a hole in the UK public finances.

The Financial Times reports that Hunt was drawing up plans to extend a freeze in the inheritance tax “nil-rate band” from 2025-26 to 2027-28, a move that would raise at least £500m for the Treasury.

The plan is part of a broader strategy to use “fiscal drag” to sneakily raise the funding needed to restore order to the public finances when Hunt delivers his Autumn Statement on 17 November.

With inflation high, Hunt reportedly plans to keep tax-free thresholds at the same level for various levies, including those on income, pensions and capital gains to expand the state’s tax haul by billions of pounds via the back door.

But the Chancellor should be wary of placing a greater financial burden on homeowners in next weeks’ Autumn Statement according to David Alexander, chief executive of DJ Alexander.

He said that the rumoured extension of the freeze on Inheritance Tax (IHT) and possibly capital gains tax (CGT) thresholds would be an easy income grab for the government but could make homeowners upset and angry that they were being so blatantly targeted for increased taxation.

Alexander said: “Targeting property is an easy hit for Chancellors as it can’t be moved abroad or hidden in a balance sheet, but the concern is that this is an option that has become all too familiar.

“Last year Rishi Sunak introduced a freeze on the thresholds for IHT to 2025-26 with the current Chancellor expected to extend this to 2027-28. Given that the current threshold of £325,000 for IHT was introduced in 2009 this would be a 20-year freeze on the rate.”

“To put this into perspective if the IHT threshold had kept pace with inflation it should, by September 2022, be at £464,643 and most of that increase does not include the record levels of inflation experienced this year. The current level of IHT is 42.9% lower than it would have been if it had kept up with inflation. By 2028, with the current levels of inflation. you could be looking at the IHT threshold being worth a quarter of its 2009 level.”

David continued: “While nobody denies that the Chancellor has tough decisions to make it does seem harsh to single out homeowners for particular, and repeated, punishment. The Conservatives need to be wary of becoming the party that taxes homeownership, that hits savers, and punishes hardworking people for providing a roof over their heads and a home for their families.”

Alexander points out that property investors and second homeowners will also be hit with a further freeze on the CGT allowance on second homes and rental properties.

“Again, many may feel this is justified but the truth of the matter is that punishing people for investing their wealth in property is not a good look for the Conservatives,” he added.

Alexander continued: “Nobody expects to come out of the Autumn statement better off but there is a real danger in singling out certain groups in society who may have accumulated wealth through property. The Conservatives have always been known as the property-owning party, but they now seem in danger of damaging this reputation as they seek ever more punitive means of balancing the books.

“Voters have long memories and these moves, if implemented, will impact people over the period of the next general election so Government needs to be aware of the potential consequences of these actions at the ballot box.”