The number of properties in the UK valued at more than the 275,000 Inheritance Tax threshold now stands at a whopping 2.1 million or 12% of all owner-occupied properties.Research out from Halifax shows that there has been an almost three-fold increase in the number of properties above the threshold in the past five years from 800,000 in Q3 2000 to 2.1 million in Q3 2005. The IHT take is expected to more than double between 1996 and 2006, from 1.6bn to a projected 3.4bn. A properly drawn up will together with professional tax advice are key factors in ensuring owner occupiers effectively manage their tax liabilities. Halifax says the average house price is now above the threshold in one in 10 local authorities, or 38 of the 384 surveyed. Five years ago the average house price was above the then threshold of 234,000 in only one in 50 local authorities. Halifax says the IHT threshold of 275,000 would now be 406,600 if it had been increased in line with house price inflation. House prices have risen by 164% in the past 10 years compared with a 79% rise in the IHT threshold. West Midlands has the highest proportion of sales above 275,000 while Northern Ireland has the lowest. More than one in three residential property sales in London are above 275,000, with one in three boroughs showing house prices above the IHT threshold. Martin Ellis, chief economist at Halifax, says: “More than two million UK households now see the value of their home above the Inheritance Tax threshold compared with 800,000 households five years ago. “This trend will worsen unless the government acts now and raises the threshold to reflect the increase in property prices. “The IHT threshold would be raised to 406,600 if it were increased in line with the rise in house prices over the past 10 years – more than 130,000 above its current level. We call on the government to link the threshold to house price inflation. “The government made a welcome move earlier in the year to lift many first-time buyers out of the Stamp Duty net. We hope it will now do the same for Inheritance Tax.”
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Dear Delia My client bought a buy-to-let property early this year and found what seemed like good tenants – an unmarried couple.
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