In the first Conservative budget for 19 years George Osborne officially announced changes to inheritance tax thresholds that will affect many homeowners, particularly across the South East.
The budget introduced a £175,000 family home allowance to enable parents to pass their home down to their children tax-free. It will be phased in from April 2017.
This family home allowance will be added to the current Inheritance Threshold of £325,000 per person taking it up to £500,000, which means that married couples or those in a civil partnership will be able to pass on assets worth up to £1,000,000 without having to pay any inheritance tax at all.
The announcement wasn’t entirely unexpected, with many papers speculating over the weekend that changes were on the horizon, and it has generally been met with a positive response.
Andrew White from Seymours in Knaphill comments: “At Seymours we’ve been selling homes across West Surrey for over two decades and we’re fully aware of the importance many of our customers place on their family home, many wishing to pass this on to their children or grandchildren. The forthcoming changes in the inheritance tax threshold will be welcomed by all those concerned about the level of tax that will be served on their estate.”
These inheritance tax changes have, however, caused concern in some quarters with economists fearing they will result in fewer people downsizing their properties in later life, choosing instead to remain in large family homes that they have outgrown.
While this might be an issue in some areas, it is less of a concern in Surrey where house prices are already high. Many family homes in the area are already priced well over the £1m mark. Of homeowners who do decide to downsize their properties, the high value of properties in the area means that, in many cases, the value of their home still remains close to the £1m threshold.
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