Fewer people will face inheritance tax following the recent Budget - 17th March 2005

The Chancellor, Gordon Brown, has announced above-inflation rises to the inheritance tax thresholds. From April it will rise from the current £263,000 to £275,000, with further increases planned for 2006/07 (to £285,000) and then to £300,000 in the 2007/08 tax year. 

Increasing house prices mean that more estates are subject to inheritance tax after death now than were a decade ago. It is unusual to introduce above-inflation rises but, in doing so, it means that fewer estates (the Government estimates only 6%) will be subject to inheritance tax. 

Some people have suggested that the increases do not go far enough but Rebecca Parkman, a Partner in the Tax and Trusts team at Wards Solicitors says:

"The increase to the IHT threshold is significantly above predicted inflation rates and will be welcomed by many lower to middle income households. However, in order to minimise your liabilities for inheritance tax, it is still important to make a Will and to take legal advice on the many wealth preservation tactics available".