IHT changes 'welcomed'

22-Mar-2007

Following yesterday's Budget, the decision to increase the inheritance tax (IHT) threshold - which may be of interest to first time buyers - an expert has broadly welcomed the decision.

However, according to Stephen Kenny, the chief executive of The Property Investment Market (TPIM), although the increase in the IHT threshold to £350,000 is a welcome move, homeowners - which may include recent first time buyers - in London and the south-east may not get much relief.

Instead, Mr Kenny is calling on the chancellor to introduce banding into the structure for paying IHT.

"At present, inheritance tax is the same for someone with a £2 million estate as it is for a £300,000 one," said Mr Kenny.

"Introducing banding would avoid this and the effect on the chancellor's income would be minimal," he added.

In London and the south-east, property prices now average approximately £260,000, according to TPIM.

Other measures introduced in yesterday's announcement include a 2p reduction in income tax, in addition to a 20 per cent increase in the cash individual savings account limit.

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