Analysis by NFU Mutual of house price data data has shown that families could reclaim thousands of pounds in inheritance tax following the latest slump in house prices.
Data released yesterday by the Office for National Statistics (ONS) revealed house prices in southern England (London, East of England, South East and South West) fell by 0.9% in the year to July 2019.
Prices fell 2% in the South East over 12 months and 1.4% in London, but this trend is not just limited to the south.
Prices also fell in the North East by 2.9% over the year to July 2019.
Inheritance tax is charged on the value of assets at death and must be paid before the estate can be handed over.
But if executors sell a property for a lower value within four years of the death, they can reclaim the tax paid on the loss through an IHT38 form.
With house prices falling in many areas of the country, this potential rebate could affect thousands of people.
Sean McCann, chartered financial planner at financial advice firm NFU Mutual, said: “Many families are missing out and paying more inheritance tax than they need to.
“When property prices and share values fall, rebates are not given automatically and need to be proactively claimed.
“Those that opt for DIY probate are not always aware that IHT can be reclaimed in this way.
“What’s more, with over half of all estates paying IHT falling in London and the South East, those living in and around the capital, where house price falls have been the most dramatic, should ensure they don’t miss out on any potential rebates due.”