Chancellor Gordon Brown is under pressure from economists to act on rising house prices when he delivers his Budget speech tomorrow.

He may be very tempted to cool the property market by slapping extra stamp duty on house purchases - though this will not be popular with

homeowners and buyers.

The Chancellor will present his Budget against a background of an economy in robust health, low inflation and a see-sawing stock market as well as rising property prices.

With UK house prices currently roaring ahead at an annual rate of 16%, according to the Halifax, Mr Brown could well bring in higher rates of stamp duty at the upper end of the property range, starting at about £250,000.

This would have a particular effect in London and the South East, where the highest proportion of expensive homes are found. At the same time, the Chancellor might bow to pressure from a host of investors' organisations and abolish stamp duty on share purchases.

Lobby groups said that if the Chancellor really wants to encourage savings and enterprise then this tax on investment should go. Turning to direct taxation, Mr Brown is likely to be generous at the lower end of the scale. He could raise individuals' personal allowances, currently £4,335, thus taking many people out of the tax-paying bracket altogether.

He could be similarly generous with the various age-related allowances for pensioners. But he might be tempted to claw back some of this money by hitting the better off. He cannot do this directly, by raising income tax, because his hands are tied by Labour's manifesto pledge not to do so.

However, he could tighten the rules on Inheritance Tax, which is known by accountants as the "voluntary" tax as it is comparatively easy to avoid with some shrewd investment planning. The Chancellor could ask himself why the very wealthy should not pay a bit more tax on their estates.

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