According the fund Manager The WAY Group, IHT planning specialist, each family normally consists of two estates – one for each partner – with only the second to die likely to incur inheritance tax.
So, converting the Chancellor’s estimate from ‘single’ estate to ‘family’ suggests that a staggering 12 per cent of families will be stung with the IHT bill within three years.
Paul Wilcox, chairman of The WAY Group, said: “Those dying over the next three years will tend to be of the post-WW1 generation and not the rather more wealthy entrepreneurs and property-owners of the 1970’s and 1980’s who were born after the Second World War.”
Spiralling property prices can only exacerbate the trend towards far higher IHT across the board with an increasing number of families being hit.
And there is going to be a real explosion in the amount if IHT collected by the Treasury over the next two decades, predicts The WAY Group.
Wilcox said: “Property prices are likely to be one of the key drivers of families being exposed to IHT. Halifax recently estimated that nearly a third of all detached properties in England and Wales are valued at more than the 2007/08 threshold of £300,000.
“It is all well and good for the Chancellor to announce in the Budget that the threshold will rise in stages each year to £250,000 by 2010, but if house prices continue to rise at their current rate, this increase will mean that in real terms the burden will be further increased, making sensible and early tax planning even more important.”
