Chancellor 'was wrong' on IHT projections

28-Mar-2007

In news which may be of interest to prospective first time home buyers, Britain's chancellor has underestimated the impact of inheritance tax (IHT) upon UK estates, an expert has claimed.

According to The Way Group, a consultancy firm, the chancellor's estimate that six per cent of Britain's estates are likely to be liable for IHT by 2010 falls short of the true figure, which may impact upon the future estates of first time home buyers.

Indeed, the group believes that rising house prices will act to increase vulnerability to IHT and that the true figure could be as high as 12 per cent by the end of the decade, when family estates are considered.

"Property prices are likely to be one of the key drivers of families being exposed to IHT," said Paul Wilcox, chairman of The Way Group.

"If house prices continue to rise at their current rate, this increase will mean that in real terms the burden will be further increased, making sensible and early tax planning even more important," he added.

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