Clause 4
Finance Bill
5:30 pm
Stephen Timms (Chief Secretary, HM Treasury; East Ham, Labour)
I do not have the figure in front of me, but I hope I can give the hon. Lady some reassurance, particularly about the link between rising house prices and the payment of inheritance tax, which is where much of the discussion tends to focus. During the last quarter of 2006, the mean house price in the UK was £199,000. The median price, which I guess one might regard as the price of the typical property, was £175,000. In the south-east and London, the corresponding prices were £250,000 and £292,000 respectively. All those figures are within this year’s nil rate band.
One often reads comment in the press that misunderstands the position that we are in. When a home is owned with a mortgage, the mortgage debt will reduce the size of the estate as well. The truth is that the vast majority of property ownership falls well within the inheritance tax nil rate band. By fixing the band for 2010-11 at £350,000, we are continuing to provide certainty for families about the allowance in future years. I should like to underline my view that inheritance tax is fair, progressive and well targeted. I commend the clause to the Committee.