£8,000 rise in inheritance tax nil band
The government has increased the nil rate band for inheritance tax from Pounds 234,000 to Pounds 242,000 to come into effect on 1 April.
Estates with a value exceeding the threshold will be taxed at a flat rate of 40%, with the Treasury estimating this number at 23,000 for 2001/02, or 4% of all deaths.
In the 2000/01 tax year, roughly the same number of heirs paid an estimated Pounds 2bn on their inheritances.
Inheritance tax has come under criticism from a number of organisations, such as the Chartered Institute for Taxation, which says the way it is calculated is unfair, given the continued rise in property prices.
All wealth, including houses and gifts, inherited from a deceased person is subject to inheritance tax if it exceeds the threshold unless it inherited from a wife or husband, in which case it is exempt.