The number of homes in the UK valued at more than the inheritance tax threshold increased by more than 500,000 in the first half of 2004 according to Halifax financial services. As a result, 2.4m homeowners are potentially liable to IHT.
The 12 per cent increase in house prices in the first half of the year and the 3.1 per cent increase in the IHT threshold in April from £255,000 to £263,000 accounts for the increase of affected properties.
With 74 per cent of homeowners with savings or investments saying their biggest asset is their home, the Exchequer is benefiting greatly from the increased revenue from the housing market, currently taking in £2.5bn.
Halifax financial services chief economist Mike Ellis says: “The government's reluctance to raise the threshold in line with house prices means that more and more ordinary people are now finding that their estate will potentially be subject to IHT. We therefore advise homeowners to plan ahead to minimise the possible impact.”