Inheritance tax (IHT) must be brought in line with house price inflation, the National Association of Estate Agents (NAEA) has insisted.
With continued growth in property prices revealed by the latest figures on March house prices and the tax band fixed at £285,000 until 2011, IHT is rapidly becoming 'main stream', the association warned.
The former 'rich man's tax' hits ordinary homeowners all too often, the association warned.
NAEA chief executive Peter Bolton-King believes that, although the latest budget did provide for the nil band rate, the level at which IHT is not payable on assets, to rise by £65,000 over the next five years, this is "way behind" house price growth.
Nevertheless, it is possible to plan for IHT, John Varley, chief executive of MoneyMarketplace, advised.
By dividing assets to keep below the £285,000 lower threshold at which the 40 per cent tax rate becomes payable, and using tax allowances for both elderly parents when the second passes away, homeowners can pass on more assets tax-free, he suggested.
Find out more about inheritance tax thresholds
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