Inheritance tax risk for 4 million UK houses by 2020, says Halifax

06 April 2006
According to research from Halifax bank, if inheritance tax (IHT) is only increased in line with retail price inflation until 2020, 4.2 million properties will be subject to fees.

The findings are based on the fact that the last time the IHT threshold was raised significantly was in 1996/97, and Halifax projects that the Exchequer's revenue could rise to £5.5 billion, which represents a 244 per cent increase compared to that year.

If the IHT threshold had been linked to house price rises in recent years it would currently be £140,000 higher than the current level of £285,000, the study claims.

Martin Ellis, chief economist for Halifax, said: "Since 1996/97 there has been a sharp increase in the number of estates paying inheritance tax and also the number of properties valued above the inheritance tax threshold.

"Modest increases in the threshold have lagged well behind the increase in house prices," he explained.

The total number of estates estimated to pay IHT this year is around 35,000, which is more than double the number that fell into the equivalent bracket in 1996/97. More than half of these estates are in London and the south east.

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