Navigating pre-owned asset rules

Inheritance

The new pre-owned asset rules mean that people who pass on assets to relatives while still using them face inheritance or income tax, but there are a number of ways to minimise the impact

The Treasury estimates that only 6% of estates are liable for inheritance tax (IHT) when the owner dies. Yet this has become a contentious political issue, and the Government is to raise the threshold at which IHT is payable on any estate. The threshold will be increased from the current £260,000 to £275,000 for 2005/06, £285,000 for 2006/07 and £300,000 for 2007/08. Although the increase is welcome, it does not take into account the massive boom in property prices that has brought many middle class families into the IHT net. According to figures from HM Revenue and Customs, the number of...