A recent report from HMRC shows that those counties in Britain where property prices are highest are paying big Inheritance Tax bills. According to analysis in 2019 from the property website Zoopla, it showed that some homes in Devon are rising by up to an incredible £90 a day. This amount is only likely to have increased further with the current peak property prices.

Surrey is officially Britain’s highest paying county when it comes to Inheritance Tax (IHT). In fact, in 2017-18 the average family in the county paid out around £234,000. Property prices in the county have risen 54 percent since 2010. The national average property price increase in the last 10 years is a huge 40 percent and rising.

Interestingly, however, last year it was reported that the place where home prices are rising by more than eight times the UK average is in Exmouth.

The impact on Inheritance Tax

The £325,000 IHT nil rate band, which is the threshold under which you pay no IHT, has not changed since 2009. When factoring in the steeply rising cost of inflation over the past 10 years plus, if the nil rate band had increased in line with inflation it would enable families to pass on a further approximately £100,000 free of IHT today. Instead, this amount may be subject to a 40% IHT charge amounting to £40,000 in tax.

There are now IHT allowances that allow those who are married and civil partners to combine allowances and pass on up to £1m tax-free under the residence nil rate band. However, this only applies where the main residence is passed onto direct descendants or a qualifying trust. It is important to seek timely professional advice on mitigating what could be an unexpectedly large IHT bill for your family.

How we can help

At Gorman Legal, we can advise you on Inheritance Tax planning to ensure you maximise the reliefs and allowances available and take all the appropriate steps to save IHT where possible. We assist clients in Devon and beyond. Read more about how we can help with Inheritance Tax CLICK HERE

Make a Free Enquiry today about our specialist Inheritance Tax Planning and Will Writing services by emailing us at info@gormanlegal.org.uk, or calling us on 01884 216106.