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Last Updated: Monday, 20 March 2006, 22:24 GMT
British dismay at inheritance tax
Houses in Esher
High house prices have forced more people into paying IHT
Many Britons would prefer to pay more in income tax if it meant inheritance tax (IHT) could be abolished, a BBC News survey suggests.

Nearly 60% of 1,006 people surveyed said they wanted IHT to be scrapped.

Interestingly, support to abolish IHT was stronger in the north than in the south of the country, where average house prices are highest.

Chancellor Gordon Brown will present the Budget on Wednesday, and IHT reform is widely rumoured to be on the agenda.

People get upset at the thought that they work all of their lives and then the government comes along and takes 40%
Penny Bates, Menzies chartered accountants

The numbers of people's estates being subject to IHT has increased sharply of late, largely as a result of soaring UK house prices.

"IHT is an emotive issue," Penny Bates, tax partner at Menzies chartered accountants, told BBC News.

"People get upset at the thought that they work all of their lives and then the government comes along and takes 40%."

Just 1 in 4 people surveyed by the BBC agreed with the statement that levying a tax on the estates of the deceased was a fair way for the government to raise money.

Regional differences

Region-by-region, IHT is least popular in the midlands, north of England and Scotland.

"Maybe more people in the south are resigned to IHT because house prices have been so high for a long time," Ms Bates said.

"Whereas people in the north have only recently seen the price of their house rise to a level where it could ultimately be subject to IHT."

Last month, Scottish Widows estimated that almost half of homeowners in London and over a third in the rest of the south of England are over the threshold for paying IHT.

By contrast 23% of homeowners in the north and 15% in Scotland are over the threshold.

The government is expected to earn 3.4bn in inheritance tax this year.

In last year's Budget, Gordon Brown announced above inflation increases to the IHT threshold.

The threshold is scheduled to rise from 275,000 to 300,000 by the tax year 2007/08.

In recent days, newspapers have reported that the chancellor is set to close IHT loopholes in Wednesday's Budget.

See how inheritance tax is likely to affect families

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