"Treasury waiting for us to pop our clogs"

05/09/2007

As the first wave of the 17 million baby boomers born between 1945 and 1965 prepares for imminent retirement, a financial consultancy is warning that inheritance tax looks set to stay in place – with the Treasury reaping billions of pounds every year.

Paul Wilcox, chairman of fund manager and IHT planning specialist  WAY Group says that: “Chancellor Alastair Darling, like his predecessor Gordon Brown,  will be loathe to extend any tax breaks to this group – the first truly well off generation,” he says.
 
“The revenue from IHT is central to the Government’s core planning. The current baby boomers who are now retired or about to retire will start to die off within the next decade or so, and the Treasury is licking its lips in anticipation of some bumper pay days.”
 
As a result of increasing property prices, increasing numbers are being hit by 40 per cent tax on everything they own over the IHT threshold when they die.
 
“Revenues are up by more than 50 per cent in the past five years and the Government expects to raise £4bn from death duties in this tax year,” adds Wilcox.
 
“Even accounting for longer life expectancy because of medical advances, less smoking and more informed diet and exercise programmes, the first true baby boomer generation – those born immediately after the end of WWII – should be putting serious IHT planning in place.”
 
The number of homes valued above the IHT threshold has nearly doubled in five years, with the average detached house in London, the South East and the South West worth more than £300,000.

 

“The Treasury is waiting for us to pop our clogs,” says Mr Wilcox.