Increasing personal wealth and price inflation in the UK property market has resulted in more estates being liable for inheritance tax (IHT), according to Defaqto.
Figures published by The Office of National Statistics show that 4.8 million consumers in the UK own homes worth over £300,000 – with 40 per cent tax payable on assets in excess of this amount – while a further 4.5 million will be required to pay IHT when their personal funds are taken into account.
The 2006 budget saw changes in taxation of monetary transfers into certain types of trust funds, making previously tax-free gifts potentially liable to tax. Defaqto recommends seeking financial advice in the matter.
Kate Marsden, marketing director at Defaqto, commented: "As UK house prices continue to outstrip rises in the IHT threshold, more and more households are falling into the IHT net".
"Advance tax planning is essential if individuals bequeathing assets to their heirs want to reduce the potential IHT bill their beneficiaries will face. Writing a will is a good place to start," she added.
Defaqto is an independent financial product and service research company.