The research showed the problem would be faced much sooner by homeowners in Greater London (one year), the South East (four years) and East Anglia (six years) if house prices continue to increase at the current rate.
The Stroud & Swindon research also revealed that if the current average annual growth in the IHT threshold continued (3 per cent), even regions with traditionally lower house prices would eventually be affected: Scotland (16 years), Northern Ireland (11 years) and the North West (12 years).
While the timeframe that this research reveals is concerning, it is likely that IHT will hit most households even earlier if they boast the average amount of savings (£17,271) or have other taxable assets.
Paul Chafer, sales director from Stroud & Swindon Building Society, commented: “Many ordinary consumers still assume that they don’t have sufficient assets to be liable for inheritance tax. However, this research shows that in eight years if a person owns the average UK home, they are likely to be liable for inheritance tax at 40 per cent of everything over the IHT threshold.
“This is potentially a huge amount and when consumers have already been paying tax on their income their whole lives, seems a completely unjustified penalty. Therefore, we actively encourage all homeowners to speak to an independent financial adviser to make sure that they are not leaving an unnecessarily high tax bill because they have not received guidance on this issue.”
