The number of millionaires increases by a quarter every three years but the nil-rate inheritance tax band remains static until 2021

Oliver Gill
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It is estimated that there will be 600,000 millionaires in the UK by 2020 (Source: Getty)

The number of UK millionaires is growing at such a rate that Britain is on track to have nearly half a million of them by the end of the year.

Analysis of HM Revenue and Customs' (HMRC) UK Personal Wealth Statistics indicates that the number of millionaires is growing by over a quarter every three years and may lead to many more people paying inheritance tax given the nil rate band will remain frozen at £325,000 until 2021.

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It is estimated that there will be 495,000 millionaires in Britain by the end of 2016 and 600,000 by 2020 according to the research prepared by financial services provider NFU Mutual.

"More millionaires means more inheritance tax for the Treasury. These figures show that the taxman is set to take an ever greater slice of people’s estates over the next few years as house prices and share prices have boosted the wealth of the nation," said Sean McCann, a chartered financial planner at NFU Mutual.

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From April 2017 the tax-free allowance on a family home for inheritance tax purposes will be introduced and this will rise from £100,000 to £175,000 by 2020.

"By which time it will be possible for a married couple to leave up to £1m free of inheritance tax," said McCann.

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