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There is set to be a rush of home valuations in England and Wales after the Chancellor George Osborne signalled that properties worth up to £1 million will be scrapped from inheritance tax. Currently the tax is levied on homes from £650,000 but in the government’s mini Budget later this week he will raise the threshold. It means that owners of homes worth up to £1 million can pass them on to their children tax free. An analysis of Land Registry data suggests that owners in Gloucestershire, Yorkshire, Somerset, Dorset and Cheshire may be leading the charge to get their homes re-valued. It could also leave looming insurance problems for up to a third of families living in high value or listed homes which are more expensive to repair or rebuild, according to the study by NFU Mutual, a leading rural insurer and financial advice firm. ‘If you don’t know how much your home is worth, then there’s a real danger that you and your family could lose out. Around three in every 10 homes are undervalued by their owners, leaving families at risk of underinsurance and an unexpected tax bill,’ said Nicki Whittaker, high value home specialist at NFU Mutual. Around 80% of million pound homes sold in England and Wales in the last 15 years are in London and the South East but there are concentrations of expensive homes across the rest of the country, including Gloucestershire, Cheshire and Dorset. ‘We expect there will be a rush to re-value these properties as parents and grandparents look to hand down as much as they can to their families. But many of these bespoke and listed properties need more thorough assessment to establish their true worth,’ explained Whittaker. ‘Figures from our valuation partners show many expensive country homes are dramatically undervalued because owners are often unaware that the cost of rebuilding listed and unique properties is so much greater,’ he pointed out. ‘It’s clear from these results that thousands more people need to take action if they want to make sure their biggest financial asset remains in the family. A valuation and some simple tax planning would help to make sure people are fully protecting what is rightfully theirs,’ he added. The Conservative Party outlined plans for a new transferrable main residence allowance in its election manifesto earlier this year. The move, to be announced by Osborne in his Budget speech on Wednesday 08 July 8, would increase the effective inheritance tax threshold for married couples and civil partners to £1 million. Continue reading →

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