Mander Hadley Logo


Mander Hadley Solicitors in Coventry 024 7663 1212


Mander Hadley Solicitors in Kenilworth 01926 857631

Cover all
  the angles

Related links Down Arrow

Make an enquiry Down Arrow

Read more articles in: Mander Hadley, News

Homes price boom sparks rise in Inheritance Tax payments

Campaigners have raised concerns that more and more estate beneficiaries will be drawn into paying Inheritance Tax (IHT), after a steep rise in payments.

Chancellor Rishi Sunak has frozen the IHT nil rate band and residence nil rate band at £325,000 and £175,000, respectively, until 2026, whilst the value of homes has rocketed – potentially drawing more people into paying this tax.

Given this freeze and rising house prices, it should come as no surprise that the latest IHT receipts totalled £3.6 billion between April and October this year, up from £3 billion in the same period last year.

The standard IHT rate is 40 per cent and it’s only charged on the part of your estate that’s above the threshold.

So, if your estate is worth £500,000 and your tax-free threshold is £325,000. The IHT charged will be 40 per cent of £175,000 (£500,000 minus £325,000).

In some cases IHT nil rate band threshold of £325,000 can be enhanced by the residence nil rate band of £175,000 making an effective tax threshold of £500,000 and in other cases for a widow or widower or a surviving civil partner, this might doubt to £1m before tax is paid. The operation of these various thresholds and allowances can be confusing.

The estate can pay IHT at a reduced rate of 36 per cent on some assets if you leave 10 per cent or more of the ‘net value’ to charity in your Will.

Linsey Graham, a CILEX Probate Practitioner with Mander Hadley, who specialises in Wills and estate planning, said: “Rising house prices mean it is more important than ever to consider your estate’s tax position.

“Preparing a Will can be a complex process, and being aware of the IHT rules is pivotal, as well as exploring your options to ensure your estate is set up in the most tax-efficient manner.

“There are a number of tax efficient steps that can be taken, providing that plans are put in place in good time; including trusts which can help protect your legacy and ensure your loved ones are financially taken care of.”

To find out more about trusts or to discuss making a Will, please get in touch with us.

Mander Hadley

Mander Hadley Solicitors is not only a long established firm, but is vibrant and successful, with a forward thinking approach.