We have been talking a lot recently about how many may not yet realise it but, with the significant rise in value of property in almost all regions across England, their estates could now be estimated to be above the threshold for paying inheritance tax (IHT) – £325,000 for a single person and twice that for a married couple.
In support of our views, a report has been published this week by Saga Investment Services showing that IHT payments are set to hit a record high this year as more property sales are affected. The study of 105 postcode areas in England and Wales found that 24 per cent of houses sold last year exceeded the £325,000 threshold. In central London, 82 per cent of properties sold so far this year exceeded that figure, up from 76 per cent in 2015. And outside the capital, St Albans saw a jump from 62.7 per cent last year to 70.8 per cent so far this year.
Understandably, many taxpayers resent IHT above all other taxes as it is considered a tax on inflation, especially on housing as demonstrated here, and as an additional tax on retained income that has already been taxed during one’s lifetime. However, IHT can be mitigated with forward planning.
At Beavis Morgan, our tax experts can guide you and advise you on the available strategies. If you would like to know more, please contact Alan Ford or your usual Beavis Morgan Partner.
Parents pay £53,000 more to live near top schools
The use of trusts to minimise IHT
Increase in requests for advice on IHT