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Life insurance a must as IHT bites

Date: Tue, 12 Apr 2005

Homeowners are being urged to consider life insurance to help cover inheritance tax (IHT) on property.

Research by HSBC has discovered that households in the south of the UK could find themselves liable for IHT increases of more than 130 per cent, as property prices continue to rise.

Although IHT relief was recently increased by £12,000, more and more homes are starting to be subject to the tax. It is estimated that nine out of ten of the UK's IHT hotspots outside London, all of which are either in the south or the midlands, will experience rises in IHT liability over the next twelve months.

Steve Britain, head of HSBC's independent financial advisory service, said: "The new IHT threshold is generally good news, but only relatively so for most people.

"For many, it's actually tax 'relief-grief' because of house price inflation, particularly those who weren't previously liable for IHT."

Mr Britain is urging homeowners to seek financial advice on how they can able reduce the burden of IHT on descendents.

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