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With the rising cost of property around the world, folk from the UK are facing huge inheritance tax bills. What we mean by folk from the UK, are those who were born there or have spent more than 17 years and hence have become domiciled UK. If you are not sure then best you find out since there has been a massive 75% increase in what Gordon Brown is collecting on your worldwide estate.
Recently 21,750 estates paid up over £683 million. However only 573 estates worth more than £2m paid up since many rich people take expert advice to avoid this tax. For the full story,
Figures published this week by HM Revenue and Customs highlight how the death taxes are hammering ordinary families. They show that 21,750 estates paid inheritance tax worth £683million - equal to a bill of more than £31,000 each. High property values mean thousands more people will be forced into the 'double tax trap' - taxed during their lifetime and again after they die.
The report reveals a massive 75 per cent jump in the number of estates worth less than £500,000 which paid inheritance tax over the last five years. Inheritance tax is charged at 40 per cent on all assets worldwide, typically homes, worth more than £285,000. But the numbers for the super-rich are not rising nearly as quickly as those for the less well-off. Over the last five years, the number of estates worth £2million or more paying the tax has gone up just 33 per cent, far less than the figure for more modest inheritances. Just 573 estates worth more than £2million paid inheritance tax in 2003/04 because many rich people take expert advice to help avoid the tax.
Rising house prices are the main reason that more people are bequeathing their relatives an enormous inheritance tax bill. By the end of this year, it is estimated that the average UK home will have trebled in value over the last decade to £180,000. But many family homes, particularly in the South, are worth more than £300,000, according to the Halifax. Many people have been basic rate taxpayers all their working lives, but the value of their homes means they become top-rate taxpayers when they die. Peter Bolton King, chief executive of the National Association of Estate Agents, said the figures were 'truly shocking'. |
