I briefly touched on Inheritance Tax a few days ago (pointing to an Inheritance Tax lesson on the Motley Fool), and just to illustrate why it’s definitely something worth considering, there have been a few articles published recently highlighting just how many people could be effected.
The BBC says that because of house prices rises, the tax would have to be paid by 2.1 million households.
In the past 5 years the number of properties over the IHT threshold has increased three-fold, according to the Halifax, and I suspect there are a large number of the owners of these houses that are unaware they have become liable to this tax, should they die. The Halifax is asking the government to do something about this problem by linking the inheritance tax threshold to house prices.
As I mentioned in my previous post, there are several things that can be done to reduce the effects of IHT, but obviously the first thing to do is to consider whether or not it will effect you.