In 2010/11 one in 20 estates was liable to IHT, according to the Office of Budget Responsibility: this is expected to rise to one in 10 by 2018/19.
This is a material increase but is still a much lower proportion of estates than public perception would suggest. The vast majority of deaths do not result in IHT becoming payable.
What would an increase in the threshold really mean?
Although the threshold is £325,000 this is only half the story: transfers on death for married couples (and civil partners) are exempt and the survivor can use their spouse’s unused threshold. Thus, for most couples, the effective IHT threshold is £650,000. This figure needs to be borne in mind when looking at any proposals to increase the basic threshold.
Call Hart Greaves on 01225 316 416 for more information or email Hart Greaves.