Potential IHT (Death Duties) Problems
Whitebrook Wills - Wednesday, November 12, 2014
The number of estates that will be liable to pay Inheritance Tax (IHT) will surge in the coming years according to recent reports.
House prices are rising at their fastest in years with think tank the Centre for Economics and Business Research recently predicting they would rise 24pc by 2018. In London, the average property would then be worth a staggering £566,000, it calculated.
But what is going nowhere is the inheritance tax threshold, currently at £325,000 per person and expected to remain at that level until 2019. Above that limit, estates are taxed at 40pc. The result? An increasing slice of families’ wealth is being shorn away by the taxman.
Currently, the number of households expected to pay IHT accounts for 5.5% of the total, but according to the calculations that share will jump to 12% by 2018, the end of the IHT nil-rate band freeze.
Four years ago, then-Shadow Chancellor George Osborne pledged to free families from the need to pay death duties by hiking the IHT threshold to £1 million, from £300,000 at that time. When making his most recent Budget statement, however, he decided to keep the nil-rate band unchanged until 2018, meaning more families have to pay Inheritance Tax.
That’s why more and more are using their Wills and Estate Planning to attempt to avoid some of this increased burden.
