Millions More Could Face 'Death Tax' In UK

by Jason Gorringe, Tax-News.com, London

12 February 2002

According to a report commissioned by the Observer, rising house prices in the United Kingdom may mean that as many as one in ten Britons may be hit with a hefty inheritance tax bill in the next decade.

Currently, only 4% (around 22,000) of the estates of those who die annually in the UK are liable for inheritance tax. However, figures recently released by the Land Registry have shown that for many homeowners- particularly in London and the South East, the price of their house alone could put their dependents in the frame for the modern 'death duty' after their demise.

The Observer report, compiled by the Royal Institute of Chartered Surveyors and the Chartered Institute of Taxation, revealed that around 2 million households could be within the reach of IHT in ten years time.

Experts believe that the Chancellor will come under increasing pressure in the run-up to his April 17th budget to reform the UK's inheritance tax regime, which as it stands, primarily affects the middle classes- whose major asset is their home- whilst leaving the extremely wealthy, who have the expertise and resources to plan their affairs so that little or no tax is payable, largely unaffected.

'People are really bothered about this,' the President of the Chartered Institute of Taxation, John Whiting, explained to the Observer on Sunday. 'This isn't what IHT was supposed to do. It is hitting average householders in London and the South East. And it is something they can do little about.'

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