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British dismay at inheritance
tax
High house prices have
forced more people into
paying IHT
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Many Britons
would prefer to pay more in income tax
if it meant inheritance tax (IHT) could
be abolished, a BBC News survey
suggests.
Nearly 60% of 1,006
people surveyed said they wanted IHT to
be scrapped.
Interestingly, support
to abolish IHT was stronger in the north
than in the south of the country, where
average house prices are highest.
Chancellor Gordon
Brown will present the Budget on
Wednesday, and IHT reform is widely
rumoured to be on the agenda.
The numbers of
people's estates being subject to IHT
has increased sharply of late, largely
as a result of soaring UK house prices.
"IHT is an emotive
issue," Penny Bates, tax partner at
Menzies chartered accountants, told BBC
News.
"People get upset at
the thought that they work all of their
lives and then the government comes
along and takes 40%."
Just 1 in 4 people
surveyed by the BBC agreed with the
statement that levying a tax on the
estates of the deceased was a fair way
for the government to raise money.
Regional
differences
Region-by-region, IHT
is least popular in the midlands, north
of England and Scotland.
"Maybe more people in
the south are resigned to IHT because
house prices have been so high for a
long time," Ms Bates said.
"Whereas people in the
north have only recently seen the price
of their house rise to a level where it
could ultimately be subject to IHT."
Last month, Scottish
Widows estimated that almost half of
homeowners in London and over a third in
the rest of the south of England are
over the threshold for paying IHT.
By contrast 23% of
homeowners in the north and 15% in
Scotland are over the threshold.
The government is
expected to earn £3.4bn in inheritance
tax this year.
In last year's Budget,
Gordon Brown announced above inflation
increases to the IHT threshold.
The threshold is
scheduled to rise from £275,000 to
£300,000 by the tax year 2007/08.
In recent days,
newspapers have reported that the
chancellor is set to close IHT loopholes
in Wednesday's Budget.
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People get upset at
the thought that they
work all of their lives
and then the government
comes along and takes
40%
