Inheritance tax set to hit 4.2m homes
Some 4.2 million properties will face inheritance tax by 2020 if the threshold is only increased in line with retail price inflation, one of the UK’s biggest lenders has claimed.
According to Halifax, the number of households facing inheritance tax will triple by 2020, meaning that even more homeowners will face the tax that already applies to the 1.5 million properties worth over the £285,000 threshold today.
And Halifax says that the Government will benefit from this rise, with the Chancellor set to collect £5.5bn in today’s money by 2020.
Martin Ellis, Chief Economist at 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.”
In the last 10 years, house prices have risen by 176%, while there has been just an 85% increase in the IHT threshold.