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'One third' of homes face 40% tax (UK)
One in three UK homeowners will now be subject to a 40% inheritance tax, research suggests.
The survey by Scottish Widows bank claims 8.2m people - 34% of homeowners - have assets worth more than the £275,000 threshold for the tax.
The survey of over 2,000 homeowners found most were unaware of the limit and 73% of those liable for the tax had done nothing to lessen the bill.
The government is expected to earn £3.4bn in inheritance tax this year.
The threshold is scheduled to rise to £300,000 in the tax year 2007/08.
Anne Young, tax expert at Scottish Widows, said: "For many people it is possible to cut or even completely avoid Inheritance Tax Threshold (IHT) with just a few simple steps. The first and most obvious of which is to make a will.
"Inheritance tax is levied at 40% - planning now could save thousands."
As well as making a will she recommends leaving property in a trust of some kind.
The average household wealth now stands at £258,000, according to the study.
The wide regional variation in house prices mean that the tax affects people in London and the south-east in particular.
Other study
Scottish Widows estimates that almost half of homeowners in London and over a third in the rest of the south of England are over the threshold.
By contrast 23% of homeowners in the north and 15% in Scotland are over the threshold.
The results were based on census figures, data from the Land Registry and a survey of 2,294 homeowners.
A similar study by the Halifax bank in November claimed that the tax would be payable on 2.1 million homes.
The bank claimed that 12% of all privately owned homes were worth more than the tax threshold, rising to 50% of homes in London and south-east England.
News date: 03 February 2006 - 10:43
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