Thousands of UK residents could be falling within the scope of Inheritance Tax without knowing it, according to the latest research by Barcl...

Thousands of UK residents could be falling within the scope of Inheritance Tax without knowing it, according to the latest research by Barclays, which reveals that almost three quarters of those questioned were unable to correctly identify the current IHT threshold of £263,000. Dramatically rising house prices have brought many more Britons into the IHT trap in recent years. There are three times as many people now affected by IHT threshold than there were in 1999 and it is no longer a tax solely on the rich. Many of those who will be caught are unaware that tax planning opportunities exist to mitigate its effect. To help people calculate their wealth and find out if IHT is likely to impact them, Barclays has launched a new micro site including an IHT calculator which is located at www.barclays.co.uk/estateplanning and produced a booklet called ‘A guide to inheritance tax – why pay more than you need?’. Separately, the UK’s largest lender, the Halifax has warned that the proportion of homes worth more than the threshold for inheritance tax will almost double over the next 10 years to a quarter (from 2.4 million to 4 million) of all housing stock if the government continues the current IHT regime and if the threshold increased with consumer price inflation and house prices rose at their long-run average. If the threshold were to be raised to reflect increases in house prices it would be to £390,000, according to the Halifax. This, it estimates, would cost around £1 billion in lost taxes. The number of homes that could be caught by IHT would rise from 2.4 million now to 4 million in 2015 and 6 million in 2025 if, the Halifax calculates.