The soaring value of houses in the UK has created 768,000 property millionaires.
Since August 2016 there has been a 22.95 per cent rise in the number of people owning houses valued at £1 million or more.
According to property website Zoopla, properties valued in the region of a million pounds account for 2.7 per cent of the UK’s housing stock.
London takes the lion’s share of the country’s property millionaires (430,720), with Guildford in Surrey ranking as the top UK town with the most homes worth £1 million or more.
Separate research, published by retirement planner Canada Life, suggests that one in 25 people are set to inherit estates of seven figures or more. And one in 50 can expect to inherit property worth over £5 million.
Whilst this is an exciting prospect for many, inherited wealth can cause significant cashflow problems. For example, an inheritance of £1 million could attract a tax bill of £230,000.
Head of Distribution Services at Canada Life, Karen Stacey, comments: “People’s expectations are likely to be substantially wrong without financial planning, and it’s quite likely they could lose substantial amounts of money in tax.
“For people expecting around £500,000 or more in inheritance, there is still a danger of losing tens of thousands of pounds in tax.”
In 2016/17, inheritance tax raised £4.8 billion and is set to top £5 billion in 2017/18. Experts attribute the rise also to a more aggressive HMRC which is looking more closely at people’s estates and challenging claims for reliefs.
Due to complicated tax rules, many families could possibly be inheriting less than they are entitled to. However, through careful planning inheritance tax (IHT) can be mitigated. Our Beavis Morgan tax experts are available to guide you and advise on the available strategies.
If you would like to know more, please contact Barrie Dunning or your usual Beavis Morgan Partner.