Mortgage Industry News

← Back

Life insurance vital as house prices rise

Date: Wed, 05 Apr 2006

The rising cost of housing is set to increase the number of people forced to pay inheritance tax, according to a new report.

A study by Halifax discovered that if the current inheritance tax threshold rises in line with inflation, then 4.6 million homes could be subject to the tax by 2020. At the moment just 1.5 million properties are above the threshold of £285,000.

This means that many homeowners should consider taking out adequate life insurance cover that will help loved ones to keep the family home and also enable them to pay any subsequent taxes.

Meanwhile, the government is being urged to consider linking the threshold of inheritance tax to house prices in order to reflect the escalating housing market and changes in demographics.

Tim Crawford, group economist at Halifax, said: "Inheritance tax revenues are likely to rise significantly over the next 15 years if the government doesn't index the threshold in line with house price inflation."

"The ageing of the British population means the number of estates is likely to increase substantially in the future. More of these estates will fall into the inheritance tax net," he added.


© 1998-2005 DeHavilland Information Services plc. All rights reserved.

Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.