Published On: 11 July 2023

The latest official figures reveal a significant 5.5% increase in average house prices over the past year, raising the average property price to £288,000. This surge in prices has had far-reaching consequences, making homeownership increasingly unattainable for many. 

Amidst these soaring house prices, one aspect that homeowners may have overlooked is the impact on inheritance tax. With the current threshold set at £325,000, estates valued below this limit are exempt from inheritance tax. However, this threshold has remained unchanged for over a decade, failing to keep up with skyrocketing house price inflation. 

Consequently, a growing number of individuals find themselves liable to pay inheritance tax, leading to criticisms of it as a stealth tax. In fact, HM Revenue and Customs reported a staggering £7.1 billion collected from inheritance tax during the last financial year, surpassing the previous year’s total by £1 billion. 

These figures are likely to reignite the debate on inheritance tax fairness and emphasize the importance of organizing finances to avoid potential tax burdens. While the Treasury asserts that the “vast majority” of estates do not incur inheritance tax, with over 93% forecasted to have zero liability in the coming years, the impact of inflation and the frozen threshold until at least 2028 remains uncertain. 

To safeguard your wealth for your loved ones or charitable causes, seeking professional financial advice is crucial. Regulated specialists in this field can assist you in reducing your inheritance tax bill, ensuring your ambitions are fulfilled without excessive payments to the state. 

If you have any questions or concerns about managing your inheritance tax liability, please don’t hesitate to contact us. We are here to provide the guidance you need. 



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