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Taxation: Inheritance Tax

Volume 718: debated on Monday 8 March 2010

Question

Asked by

To ask Her Majesty's Government what is their most recent estimate of (a) the costs, (b) the number of tax-paying estates that would benefit, and (c) the distributional impact of the benefit, of increasing the inheritance tax threshold to £1 million for each of the next five years. [HL2264]

The cost of increasing the inheritance tax threshold to £1 million with effect from April 2010 is estimated at £500 million in 2010-11, £1.2 billion in 2011-12, £1.4 billion in 2012-13 and £1.5 billion in 2013-14. Current forecasts do not go beyond 2013-14.

The latest estimates of numbers of estates for deaths in 2010/11, which would be taxpaying under the current regime, and the amount of tax saved under the increased threshold, are shown in the table below.

Number of estates benefiting from £1 million threshold by estate size (year of death 2010/11)

Estate size

Number of estates

Total tax saved (£bn)

0-£0.5m

3,000

0.1

£0.5-1m

5,000

0.5

Over £1m

3,000

0.7