East Anglian estate agents Bedfords, which has an office in Burnham Market, welcomed yesterday’s emergency budget announcement that inheritance tax on properties worth up to £1m is to be scrapped.
Responding to the announcement, Bedfords partner James Bedford said: “This is excellent news – and something that all hard-working families have been waiting for. A parents’ desire to pass on wealth to their children is a basic human and natural instinct. Now an incredible 94 per cent of people are going to be taken out of this controversial tax altogether.”
Under the current system, individuals start paying the 40 per cent tax on properties worth over £325,000 for an individual or £650,000 for a couple who are married or in a civil partnership. From 2017, these thresholds will rise to £500,000 and £1m respectively. On properties worth more than £2m, the allowance will be gradually tapered away until it is worth nothing to those with homes worth more than £2.35m.
There had been concerns that such changes would act as a disincentive for elderly people in expensive homes to downsize. But the Chancellor has prevented that problem by allowing people who have owned valuable homes to defer their allowance until death, even if they moved out of the property concerned decades earlier.
James Bedford added: “The existing allowance was simply inadequate here in East Anglia, where house prices have increased substantially. Properties in Norfolk and Suffolk often cost more than the threshold at which the 40 per cent tax charge was triggered. The new limit of £1m means that home-owners’ children will benefit, rather than the taxman.
“Our only complaint is that this proposal isn’t being brought into effect immediately. But after having to wait for seven years since it was first put forward, it will be worth waiting another 21 months or so for it to come into effect.”
Bedfords estate agents specialise in individual character properties ranging from substantial country houses, cottages and conversions, through to new homes and developments. The company also has offices in Bury St Edmunds, Aldeburgh and Woodbridge.