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"Inheritance tax will explode"

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  • "Inheritance tax will explode"

    "Inheritance tax will explode"
    6th Nov 2005, a Sunday

    Rising house prices are to leave 1.5 million more people paying inheritance tax, according to new research.

    The number of people over the tax threshold is set to soar by 70% from around 2m in 2002 to 3.5m in 2009, say Grant Thornton and Lombard Street Research.

    Brian Reading, director of Lombard Street Research, said: "There is no doubt that, if the future is anything like the past, the number of estates potentially liable to inheritance tax will explode."

    The current threshold for the tax is £275,000, although this will rise to a new level of £300,000 in 2007.

    Since 1997, house prices have gone up by around a 140% compared with a rise in the inheritance tax allowance of less than 30%. In this time, IHT receipts have more than doubled, despite there being no change in the 40% rate at which it is charged, say the two firms.

    Ian Johnson, head of private client services at Grant Thornton, added: "While it used to be a tax on the very rich, our research has shown it is a growing problem for millions of people with modest estates."

    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx