11:23 AM, 28th October 2010, About 11 years ago
The best laid Tory plans to boost inheritance tax (IHT) thresholds to £1 million after the election were shelved as a result of pressure from the Lib Dems when forming the coalition government.
That means IHT limits are stuck at £325,000 for the life of this Parliament – probably until 2014.
The trouble for property investors is that even owning just two ‘average’ priced homes blows through the limit without even considering any other savings or investments.
According to the recent Halifax house price index, the average house price is about £168,000, while other surveys suggest this price may be as much as £200,000.
Breaching the £325,000 top limit – £650,000 for married couples, those in a civil partnership, widows or widowers – means the estate pays IHT at a hefty 40%.
A property portfolio of £1 million would mean a tax bill of anything between £275,000 and £400,000, depending on whether the deceased was married or single and other factors.
IHT is one of those taxes where some strategic planning and managing financial assets can negate or wipe out the tax:
Wills, gifts and trusts need careful setting up by experienced estate planners to avoid the many potential pitfalls that can unravel all your best intentions.
For further information regarding our Estate Planning services please telephone our Customer Care Team on 01603 894525.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Previous ArticleHouse prices still up 8.3% on last year despite slowdown.