Homeowners should consider Inheritance Tax
by Gill Montia
The rise in property prices for the 21st month in a row has prompted Yorkshire Building society to launch a new campaign called “Keep it in the Family”.
The campaign aims to raise awareness of Inheritance Tax (IHT) issues, which have traditionally been seen as a preserve of the rich.
The Government has not reflected the increased value of the average home in the IHT threshold, which remains at £300,000.
As a resulted there has been a substantial increase in the number of people with IHT liabilities, following the death of a loved one.
The IHT rate of 40% is applied to everything in a person’s estate over the £300,000 threshold, leaving someone inheriting an estate worth £450,000 facing a bill of £60,000.
Cars and furniture are included as part of the value of an estate, so that even someone living in a property worth less than £300,000 may breach the threshold because of the value of other goods.
Yorkshire Building Society suggests that anyone not planning for IHT liability could be unsuspectingly treating the taxman as an extra child because when their estate is divided between loved ones and offspring, the taxman will be there to get his share.
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