Inheritance Tax Hits More Homeowners

More homeowners will now have to pay out inheritance tax on their homes, according to a new survey.

Some 8.2 million people – or a third of homeowners – own properties worth more than the £275,000 Inheritance Tax Threshold (IHT) and will consequently have to fork out a 40 per cent inheritance tax.

But most are unaware of the IHT with three quarters of those who would have to pay not even having looked into ways to reduce the cost, according to Scottish Widows.

The study found that the average house price now stands at £258,000 but half of London homes and over a third of properties in the south are over the threshold.

The top areas for tax are Windsor and Maidenhead, Surrey, Buckingham, Greater London, and Wokingham.

In contrast, almost a quarter of homes in the north and 15 per cent of those in Scotland would be forced to pay out.

Anne Young, tax expert at Scottish Widows, said that forward planning can save homeowners thousands if they learn how to avoid inheritance tax.

She said: "For many people it is possible to cut or even completely avoid Inheritance Tax Threshold (IHT) with just a few simple steps. The first and most obvious of which is to make a will."

In addition to making a will, she recommends leaving property in a trust of some kind.