However, this problem could hit average homeowners in London (two years), the South East (five years) and the South West (seven years) much sooner if house price trends from over the past ten years continue.
KRS has calculated that after taking into account the long-term IHT threshold growth trend of 5.8% per annum2, even average homeowners in regions with traditionally lower house prices such as Wales (17 years), Northern Ireland (20 years) and the North West (25 years) could eventually be affected (see table below). However, homeowners in Scotland with its significantly lower average growth rate (5.6%) may not be affect by IHT for over 100 years!
Region Average Yearly House Price Growth3 Number of Years from Q4 2004 till House Prices hit IHT Threshold1
United Kingdom 10.0% 13 Years (2017)
London 12.0% 2 Years (2006)
South East 10.8% 5 Years (2009)
South West 11.4% 7 Years (2011)
East Anglia 11.0% 10 Years (2014)
Yorkshire & Humberside 11.2% 14 Years (2018)
East Midlands 10.4% 14 Years (2018)
West Midlands 10.0% 14 Years (2018)
Wales 10.2% 17 Years (2021)
North 10.0% 18 Years (2022)
Northern Ireland 10.4% 20 Years (2024)
North West 9.0% 25 Years (2029)
Scotland 5.6% Post 2104
Dean Mirfin, Business Development Director at Key Retirement Solutions comments, "Many people believe that inheritance tax only affects the very rich but this research shows that the majority of homeowners could be facing this problem much sooner than they imagined. A person's home is likely to be the largest asset they will ever own and it is very worrying that this alone will push ordinary people over the IHT threshold.
"We actively encourage consumers to carefully consider their estates and make the most of their existing tax breaks such as gift allowances. With the introduction of Pre-Owned Asset Tax in April 2005, it is vital that anyone looking at inheritance tax planning, in particular where this involves releasing capital from their property, speaks to a specialist advisor before making any decision."
For a free and independent guide to equity release, or for more information call Key Retirement Solutions Free on 0800 064 7075.
