Gordon Brown’s announcement that the threshold for inheritance tax is set to rise by £65,000 in three years does little to alleviate the tax burden, said Savills research today. The Chancellor announced in his budget that the threshold will be raised from £285,000 to £350,000, but not until the end of the decade.
Meanshile the number of properties liable for the tax is only likely to grow in the years leading up to the change. Savills estimates that around 17% of all households in England and Wales are currently valued at over £285,000, and this number is only set to grow.
Yolande Barnes from Savills Research said: ‘Our forecasts for house price growth suggest that a further 106,000 properties will increase in value sufficiently to push their owner’s estates over the current threshold.’
Savills’ figures also claim that if the threshold is not raised further than was suggested today, over 1 million households in the south east alone, and just under 1 million in London, will be potentially liable by the end of the decade on the grounds of housing wealth alone.
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