Chancellor George Osborne is presenting the “summer budget” tomorrow, and the potential inheritance tax changes are set to signal a rush of home valuations. The Conservatives’ talked of plans to slash inheritance tax in their election manifesto earlier this year, with Osborne claiming the cut “supports the basic human instinct to provide for your children.” Currently the tax is payable on homes from £650,000, but the threshold is expected to be raised to £1 million in the budget tomorrow, allowing millions of couples and civil partners to pass on their homes to their children tax-free. Economists believe these tax changes will also significantly drive up house prices.
Inheritance tax: the facts
Inheritance tax applies to wealth that’s transferred on or shortly before death. At present, the tax is currently payable at 40%, with each individual receiving an allowance of £325,000. Married couples and civil partners can pass the allowance on to each other. The Conservative plan would give parents a new £175,000 “family home allowance” per person, transferable for main residences when they are passed to children or grandchildren. This will allow them to pass on assets worth up to £1 million.
80% of £1 million homes are in London & the South East
London is an inheritance tax hotspot, and around 80% of £1 million homes sold in England and Wales are in London and the South East. Seeking an expert market valuation could give peace of mind to those with tax concerns.
3 in every 10 homes are undervalued by their owners
Nicki Whittaker, high-value home specialist at NFU Mutual, comments on the potential inheritance tax changes: “If you don’t know how much your home is worth, then there’s a real danger that you and your family could lose out. Around three in every ten homes are undervalued by their owners, leaving families at risk of underinsurance and an unexpected tax bill.”
Whittaker continued: “People need to take action if they want to make sure their biggest financial asset remains in the family. A valuation and some simple tax planning would help to make sure people are fully protecting what is rightfully theirs.”
Portico Free Instant Valuation service
At Portico, we’ve recently launched a Free Instant Valuation service that can tell you the estimated price of your property in a few simple clicks. Our calculator takes into account the property’s postcode, the size of the property, the number of bedrooms and the condition of the property before making an instant estimate. Don’t lose out on handing down as much as you can to your family and find out how much your home is worth today.
If you’d like any more information on tax planning, or after finding out the value of your home you would like to sell or let your property with us, please email Abigail@portico.com or give us a call on 0207 099 4000.