With the recovering economy and rising house prices it is expected that tens of thousands more people will be pushed over the £325,000 threshold for paying inheritance tax. This would see the number of families charged on the estates they inherit increase by 35% to 35,600 during the course of this financial year.
The number is expected to increase again next year to 43,800, which is something that has led many economists and tax experts to call for reform, with increasing numbers of people caught by rising property prices.
When the value of estates rises above £325,000 they become liable for tax. Married couple are entitled to double the allowance, passing on assets to their relations worth up to £650,000, however this is less generous than other western countries (apart from Ireland) and the threshold for death duties in the US is approximately £3.2m.