Massive increase predicted in IHT revenues
13% IHT rise in first half of 2006
Revenue from controversial inheritance tax rules is expected to skyrocket
over the coming few years if the property tax threshold is only increased in
line with retail price inflation.
According to the research by Halifax Bank, revenue collected by the Exchequer
from IHT could rise to £5.5bn a year in today’s money by 2020.
This would be a 244% increase from the £1.6bn the Exchequer received in
1996/97, the last time the IHT threshold was raised significantly.
Already in the first six months of the year, inheritance tax revenue hit a
record £1.7bn, up £200m or 13% from the first half of 2005, matching the total
IHT revenue collected over the full financial year 1997/98.
Halifax estimates that the number of properties in the UK valued at more than
the 2006/07 inheritance tax (IHT) threshold of £285,000 now stands at 1.5
million, or 8% of all owner-occupied properties.
Tim Crawford, group economist at Halifax, called on the government to raise
the inheritance tax threshold to £430,000 ‘to account for the increase in
property prices over the past ten years’.