In the recent Autumn Statement, the Government predicted even higher increases in house prices in the next couple of years. If these figures are accurate, and house prices increase as the Government predicts, the total IHT paid by 2018 will be a whopping £21.4 billion, £3 billion more than the £18.4 billion predicted back in March 2013. Some commentators are not convinced that house prices will rise so dramatically, but even a small yearly increase in property prices will mean that many more people will have estates that are now subject to Inheritance Tax.
Since the IHT threshold increased from £312,000 to £325,000 (£650,000 for couples) in the 2009-2010 tax year, it has been frozen at £325,000 until 5th April 2018. As the economic outlook begins to improve, the government has made some pretty optimistic predictions regarding the prices of a number of assets, particularly properties. They predict that house prices will rise by 5.2% in 2014 and 7.2% in 2015. These increases will inevitably put a number of additional homeowners over the nil rate threshold, meaning their families will have to pay 40% Inheritance Tax when they pass away.
Will Your Beneficiaries Be Liable To Pay Inheritance Tax On Your Estate?
If your estate is worth more than £325,000 your beneficiaries will be liable for the 40% Inheritance Tax Rate when you pass away. There are a number of strategies that can be used to significantly reduce their tax liability. The exact strategies that we recommend will very much depend on your individual requirements. If this is something that you would like to find out more about, you can contact us here or give us a call on 0116 340 2150. We will then arrange a free, no-obligation consultation where we can make some clear recommendations based on your personal circumstances.
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