Inheritance Tax Will Affect One in Ten Estates
New research by the Institute for Fiscal Studies (IFS) shows that 10 percent of estates in the UK will face Inheritance Tax (IHT) by 2018. This is a substantial growth – just 2.6 percent of estates were charged IHT in the 2009-10 tax year. The trend is expected to occur as a result of the growth of house prices in the south-east and the fact that the nil rate band has not increased for eight years.
In recent years the financial crisis and the introduction of the transferable nil-rate band affected the amount of IHT charged in the UK. Inheritance Tax currently accounts for £3.5 billion of tax revenue; by 2018-19 it is expected to grow to £5.8 billion. IHT is charged at 40 percent on assets above £325,000 per person, or £650,000 per married couple.