A record number of properties sold this year have exceeded the inheritance tax (IHT) nil-rate threshold for an individual of £325,000.
New research into property sales acquired from the Land Registry in the first seven months of 2016, as carried out by Saga Investment Services, has revealed more than a quarter of properties sold in England and Wales exceeded the inheritance tax nil-rate band.
There has been an increase from 24% of property sales exceeding £325,000 in 2015 to 26% so far in 2016, up from just 13% in 2009. This year is currently on course to hit a record high of houses selling above the inheritance tax nil-rate band.
Research Reveals One In Four Property Sales Exceeded IHT Limit
From the 105 postcode areas in England and Wales included in the analysis, London properties saw the largest growth in prices, with 82% of central London properties selling above the inheritance tax nil-rate band of £325,000. Inner and outer London combined saw more than 72% of property sales exceeding the nil-rate band, up from 65% in 2015.
Overall, one in four properties sold in the first seven months of 2016 exceeded the inheritance tax limit. There was even a slight rise in the number of houses selling for more than £650,000, up from 5.4% in 2015 to 5.8% in 2016.
A New IHT Limit Set For 2017
This research comes six months before the government plans to introduce a new additional nil-rate band for individuals leaving their main home to a direct descendant. From 6 April 2017, in addition to the existing nil rate band of £325,000 an individual will be able to pass on an additional £100,000, known as the ‘main residence nil rate band’.
The new allowance will be £100,000 in 2017, rising each year until it reaches £175,000 in 2020 when people will be able to leave £500,000 to a descendant.
Help With Inheritance Tax
Inheritance tax is complex and you should speak to a professional regarding the tax-efficiency measures available that could enable your loved ones to inherit more.
Our Wills and Probate professionals can advise you on all your inheritance tax concerns, including how to make the most of the new IHT nil-rate band coming into effect from April 2017.
For advice and guidance on all aspects of planning for your future, please contact our Hoole office on 01244 311 633 or freephone 0800 988 3674 or email firstname.lastname@example.org