Inheritance tax implications of rising property prices

By Lenore Rice

Northern Ireland property owners have learned that their house values increased by the lowest amount of the whole of the UK in the year to the end of July, but can take some comfort from the fact that they will not be pulled into the inheritance tax threshold as quickly as British house owners.

While property owners throughout the UK anxiously await each new property price report for news of an increase in values, the down side is the stamp duty and inheritance tax implications that come with rising house prices. The latest Office for National Statistics (ONS) figures suggest that property prices in the UK have gone up on average by 11.7 per cent in the last 12 months, with London houses increasing by 19.1 per cent. The average house price in Britain is now £272,000 which means purchasers are liable to pay stamp duty at the 3 per cent rate. Stamp duty is paid at 1 per cent below £250,000 and is the rate most commonly paid by Northern Ireland property purchasers.

The rising property values are also having an impact on inheritance tax, as estates valued above £325,000 are charged inheritance tax at 40 per cent. In the South East of England the average property value is £337,000, immediately taking home owners into the 40 per cent inheritance tax threshold.

There have been continued calls for a reform of the stamp duty system and for a review of the inheritance tax threshold to somewhere closer to £500,000.

If you require legal advice in respect of inheritance tax, or purchasing a property in Northern Ireland, contact Wilson Nesbitt by submitting your details for a callback by clicking here

Or call a conveyancing property solicitor for information or advice at 0800 840 9290.

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