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Summer Budget: Osborne confirms increase to IHT threshold
Chancellor George Osborne has confirmed that he will scrap inheritance tax on properties worth up to £1m from April 2017.
He made the announcement during the first ‘pure’ Conservative Budget for nearly two decades.
The current rate of inheritance tax is 40% on anything above a threshold of £325,000 for an individual and £650,000 for married couples and civil partners.
By introducing a ‘family home allowance’ of £175,000 per person to allow parents to pass on their family home to children tax-free after their death, the government will increase the tax threshold to £1m on properties for married couples, and to £500,000 for individuals.
Osborne also confirmed that people who downsize to a smaller property will receive an ‘IHT credit’, essentially meaning they will still qualify for the new threshold.
How much IHT might you pay?
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Hargreaves Lansdown has calculated how much inheritance tax you might pay on your estate based on the new thresholds.
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