3,000 families a year to miss inheritance tax break
Analysis of HM Revenue & Customs statistics by NFU Mutual show thousands of estates without residential property are hit by inheritance tax bills each year.
New proposals, outlined in the Conservative Party manifesto and expected to be announced in next month’s Budget, will allow a married couple to pass a main property worth up to £1m to their children without paying any inheritance tax. Only the main residence will qualify for the extra £175,000 addition to each person’s £325,000 inheritance tax threshold.
Sean McCann, chartered financial planner at NFU Mutual, said: “The proposed inheritance tax break will stick in the craw of those who have already sold the family home to move in with relatives or even to pay for the costs of care.
“These proposals are acknowledgement from the government that the existing inheritance tax threshold is far too low. However, it would be much fairer to apply an overall increase rather than tinker with the rules around who can benefit and who can’t.
“Under the new proposals, we could soon start to see more elderly people reluctantly house-sitting for the next generation or even upsizing to make the most of this potential tax break. The wider effects on the property market could be significant.”