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Last Updated: Wednesday, 25 August, 2004, 23:00 GMT 00:00 UK
House prices boost millionaires
Two champagne glasses
One household in every 20 in London is worth a million or more
Rising house prices have doubled the number of millionaires in the UK over the past three years, say researchers.

There are now 425,000 millionaires in the UK, up from 230,000 in 2001, according to the Centre for Economics & Business Research (CEBR).

A 64% rise in house prices in the same period has contributed to the creation of so many new millionaires.

One in every 20 households in London is now worth 1 million or more, CEBR researchers said.

CEBR defines household wealth as people's property, investments and other assets, minus any debts, such as mortgages.

London: 175,000
South East of England: 90,000
South West: 32,000
East of England: 29,000
West Midlands: 23,000
North West: 20,000
East Midlands: 15,000
Yorkshire and Humberside: 14,000
Scotland: 12,000
Wales: 9,000
North East of England: 7,000
Northern Ireland: 4,000

Almost half of the UK's millionaires live in London.

According to CEBR, 175,000 or 41% of the UK's millionaires are based in the capital, making up 5.5% of all households nationwide.

A further 90,000 millionaires live in the rest of the South East.

Northern Ireland has the fewest millionaires, just 4,000 or 1% of the UK's 1 million households.

Scotland, Wales and the North East of England also have a small share of the country's millionaires.

Tax take

Separately, rising house prices have prompted concern about inheritance tax.

House prices have risen so much that an estimated 2.4 million homeowners are now potentially liable for inheritance tax, according to a recent survey by Halifax Financial Services.

Inheritance tax is currently levied at a flat rate of 40% on all estates worth more than 263,000.

Influential Labour think tank, the Institute of Public Policy Research (IPPR), has suggested a tiered system of tax, which could earn the government 147m a year.

It has suggested that estates valued at between 263,000 and 288,000 should be taxed at 22%.

Estates valued at between 288,000 and 763,000 should be taxed at 40% while estates worth more than 763,000 should be taxed at 50%.

The BBC's Richard Scott
"We're only becoming millionaires on paper"

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