Soaring house prices deliver Treasury windfall
The Treasury has seen inheritance tax revenues soar in recent years following a rapid rise in house prices.
Link: Inheritance tax law to be redrafted
IHT revenues have reached £2.8bn a year compared with £1.6bn in 1997 when Labour came to power.
The increase has come about because the IHT threshold has risen from £210,000 to £263,000 – an increase of 22% – while house prices have risen 130% since 1997, meaning more people who inherit homes from their parents or family members must pay the tax, currently at 40%.
To keep pace with house price increases, Gordon Brown would have to have raised the threshold to a staggering £483,000.
This has meant that 83 towns in Britain now have average house prices greater than the IHT threshold, compared with just one – Gerrards Cross in Buckinghamshire – in 1997.
These fact were revealed by the Conservative Party, with shadow chancellor Oliver Letwin claiming it was an example of ‘Labour’s fat and bloated government eating more and more of people’s money’, ThisIsLondon.com reported.