Inheritance tax to hit more homeowners
An estimated 2.4 million homeowners are potentially liable to inheritance tax (IHT) as house prices rise.
14:15 19 July 2004
An estimated 2.4 million homeowners are potentially liable to inheritance tax (IHT) as the numbers of properties topping the threshold increased significantly.
This is according to estimates from Halifax Financial Services, which found almost 500,000 properties were valued at more than the IHT threshold in the first half of 2004.
This is due to the 12 per cent increase in house prices in the first half of 2004, which outstripped the 3.1 per cent increase in the IHT threshold in April from 255,000 to 263,000.
The chief economist at Halifax Financial Services, Martin Ellis, said: "The government's reluctance to raise the threshold in line with house prices means that more and more ordinary people are now finding that their estate will potentially be subject to inheritance tax. We therefore advise homeowners to plan ahead to minimise the possible impact."
Yorkshire and the Humber have been most affected with the biggest percentage rise (49 per cent) in the number of properties valued above the IHT threshold.
The North West came a close second with a 46 per cent rise, clearly reflecting the strength of the housing market in the north.
Indeed, more than 60 per cent of the homes rising above the IHT threshold were outside London and the South East.
As 74 per cent of homeowners with savings and investments say the equity in their home is their greatest asset, Halifax urges homeowners to plan ahead to minimise the impact of IHT on their families.
A properly drawn will, together with professional tax advice are the key factors to helping predecessors escape unnecessary taxation.