Date Published 08 July 2015
Mr Osborne said that Inheritance tax was designed to be paid by the very rich but now it is hitting ‘ordinary families` so, from 2017, homeowners will benefit from an additional £175,000 allowance on top of the current £325,000 on the family home. `And from today` he added, those who downsize will not lose out – they will be able to pass on up to £1million without paying any inheritance tax.
Gráinne Gilmore (left), Head of UK Residential Research at Knight Frank, said, `Property trends over the last few decades have led to an amassing of housing wealth among older people. Increasing the Inheritance Tax (IHT) allowance will mean that more of this wealth flows back down the generations rather than into the Treasury coffers. It will give more people the chance to amass a deposit for a new home or make a step up the housing ladder.
`Making an allowance to protect downsizers is welcome. It means those living in large houses do not have to continue to do so in order to benefit from the IHT changes. This, in time, could help release more large homes back into the market.`