IHT-Solutions

Will the Tories abolish Inheritance tax

This is the proposal of the Conservative policy group headed by ex-cabinet minister John Redwood as reported by the BBC

I do not think this is the first time such a proposal has been made by a Tory policy group and is unlikely to be the last. It is interesting to note that the shadow Chancellor comments: ""I've got to make sure that we can afford it, that the country can afford it, that it is consistent with economic stability, that it's part of a coherent economic programme. "

I think this is the crux of the matter. IHT currently brings into the exchequer about £3.5 billion per year and is set to rise at least in line with asset prices over the coming years. If Inheritance tax was abolished then the Treasury would seek to replace the tax from somewhere else which will almost definately be as politically unpopular especially if Labour use the "robbing the poor (new taxes) to pay the rich (abolishing IHT ) " card.

For what it's worth, I anticipate that the Conservatives will go into the next election with a long-term aim of abolishing IHT but with a plan to raise the threshold above current levels proposed in the short term or even by reducing the initial rate of IHT due to say 20% on smaller taxable estates.

One way or another I suspect IHT will be a "hot political potato" at the next general election.

Does your house price make your estate potentially liable to IHT

August is generally a quiet month in the business and tax world and I would be surprised if any news of substance appears over the next 3-4 weeks in relation to inheritance tax.

In the meantime, however, I have come across a website which can assist your own IHT planning free of charge. It is well known that for the majority of people their house represents their main asset but in my experience, relatively few people have a clear idea of what the actual current value of their property is so that they can plan for IHT accordingly.

The site, www.nethouseprices.com , however, accurately reports for free all recorded house prices at HM land Registry over the last 6 years. Simply add your postcode, or a more detailed search, if required, and the sale price of your friends and neighbours' properties will be revealed.

After surfing the site for a little while myself, I am finding that the majority of the sale prices achieved in my local area are generally, but not without exception, below what the agents' asking price would have been. One could call this good news for tax IHT purposes, but that is not what most people want to hear.

Of course, the site will also be a valuable resource as and when you decide to sell, as your local estate agents will be unable to bamboozle you with stories of unrealistic prices that they may be able to achieve for your property. nethouseprices.com is certainly a site to bookmark.