Inheritance tax bills rise in Edinburgh as house prices rise


Inheritance tax bills rise in Edinburgh as house prices rise

Edinburgh’s property market has benefited from one of the strongest increases in house prices in the UK, but the city has also seen the largest increase in inheritance tax (IHT) bills.

According to new figures released by the law firm Boodle Hatfield, Edinburgh residents saw the largest increase in inheritance tax (IHT) bills, with the total paid increasing 315% to £ 54million from 2018 to 2019.

This comes down to around £ 212,598 per domain, although some have paid a lot more or less. In 2018, £ 13million was collected in Edinburgh, with an average tax levy of £ 149,425.

Edinburgh has also seen high house price inflation, with house prices rising 5% in 2019 according to Cadastre The data.

Bedford in England was another region where IHT revenue increased significantly. They fell from £ 6million in 2017-18 to £ 11million in 2018-19, although the number of IHT paid domains only increased by six, from 51 to 57. At Glamorgan, the IHT revenue increased from £ 15million to £ 27million over the same period. , and the number of domains increased from 108 to 126.

Owning a valuable family home may be enough to push an estate into the IHT. The exempt inheritance tax allowance has remained at £ 325,000 since April 2009, and 40% is charged above this amount.

However, some estates may pay nothing if the family home is passed directly to the descendants, The temperature reports.

Below the zero residence rate bracket, you can pass on an additional £ 175,000 worth of your primary residence, as long as the estate is worth less than £ 2million. On estates of greater value, the allowance decreases by £ 1 for every £ 2 above £ 2 million of the estate’s value.

A widow or widower can pass on up to £ 1million tax-free, as spouses inherit the tax-free allowance of £ 325,000 and the principal residence allowance of £ 175,000 from their partner.

Geoffroy Todd, a partner at Boodle Hatfield, said many families have experienced sharp increases in IHT bills because these thresholds have not increased with house price inflation.

He said: “The government has stated that the IHT allocation will remain at the current level until 2026, so we can expect this trend to continue over the next few years.”

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