IHT figures demonstrate the urgent need for reform

Recent research has suggested that a quarter of homes are now worth more than the current threshold for paying Inheritance Tax (IHT).

The new survey suggested that more than one in four properties now exceeds a value of £325,000, after which the tax starts to be applied.

This compares to just 13 per cent of dwellings seven years ago and is indicative of the impact that the rising cost of property has had on a substantial number of people.

It is London which has borne the brunt, with 82 per cent of the properties sold so far this year exceeding the threshold. This is up from 76 per cent last year.

While the report shows how out-dated the UK’s IHT regime has become (when originally conceived, the tax was only supposed to be levied on the wealthiest households) a number of changes to the current system have now been approved from next year.

As of April 6th 2017, an individual will be entitled to pass on £425,000 tax-free to their heirs (rising to £850,000 for those who are married or in a civil partnership).

There will be further incremental increases between now and the end of the decade, with the thresholds set to reach £500,000 (£1million for couples) in 2020.

If you require advice on Inheritance Tax (IHT) planning, please contact Ian West, or Michael Woodward or visit.