Hi,

I'm trying to create a spreadsheet that will forecast IHT charges per year until 2030 starting now. I've read the additional allowance for the main residence if passed to direct descendants will increase by the CPI per year. It's currently, for the year 2020/21, set at £175,000 (£350,000 husband and wife). I've found the following CPI rates via this webpage, are the amounts calculated correctly? Also, is there a better source to get CPI forecasts?

CPI Extra Allowance

1.00% £350,000

1.20% £392,000

1.60% £454,720

1.70% £532,022

1.90% £633,107

2.00% £759,728

2.00% £911,674

2.00% £1,094,008

2.00% £1,312,810

2.00% £1,575,372

2.00% £1,890,446

### Replies (17)

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No the amounts are not calculated correctly which should be clear by looking at your results. You think a property worth £350k will be worth £1.8m in 10 years?

You need to rework your percentages (they are out by 10%).

No, 1.12 is a 12% increase, you need 1.012 for 1.2%, remember 1.2% is 1.2/100, you need to shift the decimal place twice.

There is a good reason they used to do a Scottish O Grade Arithmetic exam and a poor reason they stopped doing it. (Also a no calculator paper, not that many of us owned calculators back then)

No, you don’t seem to have grasped percentages at all. Try a maths tutorial site since this is not such a site.

350,000 x 1.012 = £354,200

etc

You edited them after I posted but they are still wrong.

Next matter is to consider how rounding operates.

Website

The predictions stop at 2025.

As such just using a constant unchanging rate for half of the time span would be knowingly misleading.

How often would the rates be updated?

Leaving mathematics aside, what about indexing the exempt amounts[£3000pa etc] up to date? Most of them date back, unchanged, to 1965

Leaving mathematics aside, what about indexing the exempt amounts[£3000pa etc] up to date? Most of them date back, unchanged, to 1965

Leaving mathematics aside, what about indexing the exempt amounts[£3000pa etc] up to date? Most of them date back, unchanged, to 1965