LONDON - The latest survey from the Halifax Bank shows that the number of homes in the UK that fall under the inheritance tax net has almost tripled in the last five years. The Bank's report said that the increase in the house prices meant that almost 2.1 million homes would be liable to pay the tax.
This means that all these home are worth more than £275,000, above which the inheritance tax would have to be paid. Halifax said that this number equaled to about 12 percent of all owner occupied homes across the country. This tax has already been labeled as 'stealth' tax and the latest figures prove no different.
George Osborne, the Conservative Treasury spokesman was critical of Labour policies, "Hundreds and thousands of hard-working families who happen to live in parts of the country where property is expensive are being penalized," he said, adding that the tax system should reward rather than punish families who are building up their financial independence.
the inheritance tax threshold is due to be raised to £300,000 from 2007/08, but Martin Ellis, the chief economist at the Halifax was of the opinion that the margin was too narrow and that it should be increased further, "This trend will worsen unless the government acts now and raises the threshold to fully reflect the increase in property prices," he commented. The Bank is of the view that if the limit was paced with inflation, then it should ideally be at £406,600 today.
Inheritance tax has made the government richer by £3.4 billion this year and the Treasury defended the tax by saying, "No previous administration has ever linked tax thresholds, including inheritance tax thresholds, to price movements of any particular asset. The practice of this government is no different."
Posted
on : Sun, 20 Nov 2005 17:05 GMT | Investments News
By : Rob Davis
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