The Daily Telegraph claimed that the number of estates subject to inheritance tax will rise by a third this year and continue to rise in the years ahead, thanks mainly to property prices rising while the tax threshold remains fixed.
The government has said that the ‘nil rate band’ (the threshold below which tax will be chargeable at the nil rate of tax) will remain at £325,000 until 2018, by which time, the Telegraph says, the Treasury expects one in ten estates to be subject to inheritance tax as compared with just 2.8% in 2010-11.
Unless the Conservatives gain an outright victory at the next election, a substantial rise in the tax threshold is unlikely. So those facing potential 40% tax bills need to take advantage of the many ways they can legitimately reduce their liabilities.