Nov 21 2005
Over two million UK properties are now above the inheritance tax (IHT) threshold, according to a new survey from Halifax.
The research has revealed there has been almost a three-fold increase in the number of properties above the threshold, from 800,000 in 2000 to 2.1 million in 2005.
Properties worth above £275,000 are deemed to be above the IHT threshold.
IHT is the tax due on the value of a deceased person's estate. It is currently charged at a rate of 40 per cent.
Chief economist at Halifax, Martin Ellis, said: "More than two million UK households now see the value of their home above the inheritance tax threshold compared to 800,000 households just five years ago.
"This trend will worsen unless the government acts now and raises the threshold to fully reflect the increase in property prices."
According figures from Halifax the IHT threshold would be £406,600 if it were increased in line with the rise in house prices over the past ten years - more than £130,000 above its current level.
Revenue from IHT is expected to double to £3.4 billion in 2005/06 compared to £1.6 billion in 1996/97, according to government figures.
A properly drawn-up will and professional tax advice are the best ways homeowners can "effectively manage their tax liabilities", says Halifax.
By 2007 the threshold will be raised to £300,000, but some feel it is not enough.
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