IHT on the increase

The 16 per cent increase in the IHT threshold, to the present level of £250,000, during the last 5 years has been left behind by the 52 per cent growth in house prices during the same period.

According to the Halifax, this discrepancy has caused an almost three fold increase in the number of properties that are now worth more than the inheritance threshold.

Martin Ellis, group economist at the Halifax, said: "Hundreds of thousands of households are, for the first time, in danger of paying Inheritance tax simply because the tax threshold has not kept pace with rises in house prices. Because inheritance tax is an avoidable tax, homeowners need to arrange their tax affairs so as to minimise their Inheritance tax liabilities."