Nearly one third of detached property owners in the UK could be now liable to pay inheritance tax because properties increase in value at a much faster rate than the IHT threshold.

Halifax says 29% of detached house prices now occur above the 2007/08 inheritance tax (IHT) threshold of £300,000. Five years ago only 16% of detached properties were sold above the then IHT threshold of £242,000.

The biggest IHT impact on detached property owners is in the south of England, but Halifax calculates at least 10% of detached property sales occurred above the IHT threshold of £300,000 in all regions of the UK in the past year.

IHT hotspots:

• London – 88% of detached property sales
• South East - 59%
• South West 31%

The average price of a detached property in the UK, at £326,396, is above the inheritance tax threshold of £300,000. By region the average detached property is above the IHT threshold in London (£697,625), the South East (£453,876) and the South West (£336,330).

Five years ago only London (£392,135) and the South East (£269,080) had an average detached house price above the inheritance tax threshold.

Other properties

Nearly half (49%) of all semi-detached sales in London were above the £300,000 IHT threshold in 2006, as were 16% of semi-detached sales in the South East.

Over England and Wales, 8% of semi-detached property sales occurred above the 2007/08 IHT threshold of £300,000 in 2006, compared with 4% in 2001.

Successive governments (of both main political parties) have failed to increase the IHT threshold inline with house price growth. Halifax calculates that the 2007/08 IHT threshold of £300,000 would now be £460,000 if it had been increased in line with house price inflation since 1995/96.