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Are increases to inheritance tax threshold good enough? Should they have been increased further? It is certainly true that previous inheritance tax increases have not been so steep; usually increases are made in line with current inflation rates. However, this Budget has seen an increase which is way above inflation.
On other hand, contrary argument is that high rise in house prices necessitated such an increase, and even this may not be enough. The Halifax Building Society calculated that had inheritance tax threshold increased in line with house price inflation over last 10 years, then current threshold would be sitting at £390,000 - significantly less than figure announced by Gordon Brown.
Conclusion: Budget Blues
So was this a 'bad' budget' from inheritance tax point of view? Not entirely. Any increase in Nil Rate Band is to be welcomed as it sets free some of those caught in inheritance tax net. As Simon Massey (partner with chartered accountancy firm Menzies) told BBC News, "The increase to Inheritance Tax threshold is a long way above inflation and is very welcome...It is good to see something being done."
So whilst increase may not exactly be in line with current house price situation, it will certainly be a relief to many, and any increase is better than no increase at all.
JsByrne LLB (Hons) PGDip.LPc. www.Draft-Your-Will.com
Miss Janine Byrne holds a Bachelor of Law degree with Honours & a post-graduate diploma in Legal Practice. Also gained qualification in Wills Writing & is the owner/author of www.Draft-Your-Will.com and DYW Wills & Estate Planning Newsletter www.Draft-Your-Will.com/Legal_Updates.html