One in ten homeowners in the Midlands could leave their loved ones facing hefty inheritance tax bills if property prices continue to rise, according to new figures.
About ten per cent of homes in the region are valued above the current inheritance tax threshold of £285,000, which means the tax man would be entitled to 40 per cent of the extra value in the event of a death.
The Chancellor Gordon Brown, during this year's Budget, allowed for minimal increases in the inheritance tax (IHT) threshold - raising it to £312,000 in 2008/09 and £325,000 in 2009/10.
But Midland accountants and business advisors firm BDO Stoy Hayward want homeowners to protect their properties to ensure that loved ones inherit a family home and not a tax bill.
Tracey Macintosh, tax partner at the company, said: "Inheritance tax is now a far cry from the 'rich man's' tax it was once considered to be.
"Recent figures show us that if the IHT threshold had been increased in line with house price inflation, the current rate would be at a much more substantial £425,000.
"And while there have been calls to abolish IHT, it is unlikely the Government will call time on such a lucrative money-spinner in the fore-seeable future.
"The most worrying element of all of this is the fact that the 'average Joe' owner of a property in the suburbs of Birmingham, for example, may already find themselves in this bracket, unaware of what awaits their beneficiaries if no action is taken to secure their estate.
"The budget increases in the IHT threshold are not in line with ever increasing inflation in the property market, and as such the number of homeowners affected can only continue to grow."
During 2005/06 the Government collected £3.3 billion in IHT revenue, and a projected £3.6 billion is set to be collected by the end of this financial year.
But the Halifax has calculated that by 2020 the annual IHT revenue will top £5.5 billion.
Ms Macintosh added: "Most couples will leave their estate to each other when they die, so that the surviving spouse inherits the family home.
"The problem with this approach is that when the surviving spouse dies, the taxman will take 40 per cent of everything over the £285,000 IHT threshold.
"The surviving spouse will still have access to the deceased's estate without it being classed as part of
their own assets. This will significantly reduce the amount of IHT payable when the second person dies and could save up to £114,000, thereby allowing the majority, if not all, of their estate to be passed on to their children."
Tim Crawford, group economist at the Halifax, said: "Inheritance tax revenue, along with the number of estates paying tax, has risen sharply.
"This is largely due to the IHT threshold failing to keep pace with the rise in property prices over the past decade."