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More detached property owners are potentially liable to pay inheritance tax (IHT) than five years ago with one in three (29%) detached property sales in the UK above the 2006/07 IHT threshold of £285,000, Halifax have warned.

 

Five years ago only 13% of detached properties were sold above the then IHT threshold of £234,000.

Halifax calculates that in London 82% of detached property sales occurred above the IHT threshold over the past year, followed by the South East (59%) and the East of England (37%).

 

The average price of a detached property is above the inheritance tax threshold of £285,000 in London (£563,085), the South East (£390,353) and the East of England (£298,430). The average price of a semi-detached property is above the inheritance tax threshold of £285,000 in London (£334,510).

 

Sales above the inheritance tax threshold accounted for at least 50% of detached house transactions in 9 counties. All of these were in London and the South East, apart from the City of Edinburgh.

 

Tim Crawford, Group Economist at Halifax commented:

"The Inheritance tax threshold has failed to keep pace with the growth in house prices over the past ten years. Many more detached properties are now caught in the inheritance tax net. We call on the government to index the inheritance tax threshold for the increase in house prices in the past ten years, which would bring it to £425,000 and to link the inheritance tax threshold to house prices in the future."

 

 

Detached properties hit by inheritance tax