INHERITANCE TAX: INCREASE IN THRESHOLD

The inheritance tax threshold will be raised by #8,000, from #223,000
to #231,000 for tax charges arising on or after 6 April 1999.

DETAILS

1. The current inheritance tax threshold is #223,000. The increase to
#231,000 for the tax year 1999-2000 is in line with the rise in the
Retail Prices Index in the year to September 1998.

2. Measured against an indexed base, the cost of the increase is nil.
Against a non-indexed base, the increase will cost about #30 million
in 1999-2000 and #65 million in a full year.

3. Other proposed changes to inheritance tax are covered by separate
press releases Better administration and collection (IR 14) and
Blocking tax avoidance (IR 28).

NOTES FOR EDITORS

1. Inheritance tax (IHT) was introduced in 1986 to replace capital
transfer tax. The legislation (section 8 IHT Act 1984) provides for
the IHT threshold to rise automatically in line with indexation
unless Parliament decides otherwise. If the threshold had simply been
indexed since 1986, it would have been #122,000 in 1999-2000. The
threshold has in fact risen by three times the increase in the Retail
Prices Index in that period.

2. The estimated number of taxpaying death estates in 1999-2000 will
be about 19,500, as compared with around 19,000 in 1998-99. This is
around 3 in 100 of all deaths. The estimated yield from IHT in
1999-2000 will be about #2,000 million.

INLAND REVENUE PRESS OFFICE
Media enquiries to: 0171 438 6692/6706/7327
(Out of hours:0860 359544)

Non-media enquiries to: 0171 438 6420/6425
(Office hours only)

Inland Revenue information is on the Internet:
www.inlandrevenue.gov.uk

# = pounds sterling