Monday 24th July 2006
Inheritance tax revenue has hit a record high, reveals research from Halifax.
According to the Halifax House Price Index, the government collected £1.7 billion during the first half of 2006, an increase of 13 per cent on the same period last year.
This is because the inheritance tax (IHT) threshold is increasing in line with retail price inflation rather than rising house prices, the home insurer and mortgage provider says.
The figure matches revenue for the entire financial year just eight years ago, which according to the bank is unsurprising when you consider that house prices have risen 179 per cent in ten years, compared to an 85 per cent increase in the IHT threshold.
"We call on the government to raise the inheritance tax threshold to £430,000 to account for the increase in property prices over the past ten years," said Tim Crawford, group economist at Halifax.
Halifax has predicted that, if the IHT threshold continues to follow inflation, then by 2020 there will be 4.2 million properties – 20 per cent of the market – valued at more than the IHT minimum.
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