Commercial property ''could offer IHT escape route'' - commercial mortgages

25 July 2007

Households looking to deal with potential inheritance tax problems have been advised that commercial property offers a straightforward way of dealing with some of the financing issues involved.

Clerical Medical has advised that business property assets are exempt from inclusion in inheritance tax calculations because of the business property relief scheme, meaning that the increasingly large number of households who must now face up to inheritance tax could find an escape route in the world of commercial mortgages.

The advisory firm also suggested several other solutions such as taking out a life insurance policy to cover inheritance tax bills.

"Many people will be faced with the classic inheritance tax dilemma: they have an estate worth more than the nil rate band but can''t make a gift of capital as they rely on it and the income it generates. There are several options available to help mitigate or pay the anticipated IHT liability," commented Nick Williams of Clerical Medical.

The average homeowner in London is now eligible for inheritance tax due to the average property price in the capital now standing at over £300,000, it was reported earlier this week.