<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1223437568524110&amp;ev=PageView&amp;noscript=1">

Number of Estates Liable for IHT to Double in 4 Years

Posted by Kings Court Trust | 09-Dec-2013 09:00:00

The number of estates that will be liable to pay Inheritance Tax (IHT) will surge in the coming years, going up from 21,000 in 2012/13 to 42,000 in 2016/17, according to recent reports.

The main factor driving the trend is the rise in house prices, which is most pronounced in London and the South East. Coupled with the fiscal drag, thousands of homeowners will be dragged into the IHT net in the coming years. Savills' estimates suggest that by the end of 2018 house prices will see a 25.2% increase, meaning that the frozen rate will affect 176,000 estates by that time.

This is more than the peak number of 34,000 recorded during 2006-07, according to the figures, which take into account statistics from HM Revenue and Customs and data from estate agents, Savills.

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.

IHT is currently payable at 40% of a person's assets worth more than £325,000 when they die.

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, Osborne decided to keep the nil-rate band unchanged until 2018, meaning more families have to pay Inheritance Tax.

Author: Kings Court Trust

Kings Court Trust is an award-winning probate and estate administration provider that support families at the difficult time of losing a loved one. Our tax and legal teams have the expertise to advise on any situation. We are committed to offering families a great service for a fair price which is why we work on a fixed fee basis so they know exactly what our service will cost from the outset.

Topics: Blog, IHT, Inheritance Tax