With the IHT threshold set at £285,000, the bank revealed 21 per cent of households exceeded the threshold. A further five million would also be affected by IHT if total household wealth was taken into account.
The research indicated that over half the population had no knowledge of IHT or its threshold. Of those that were aware of it, 67 per cent argued that the threshold imposed was unfair. 26 per cent said that the threshold should be raised to £500,000, with 31 per cent calling for IHT to be abolished.
Anne Young, tax expert at Scottish Widows, said: “Our research shows that the government raising the threshold by just over 3 percent in the last Budget has not had any impact on the number of people liable for IHT – in fact the situation has worsened. The 6 per cent rise in house prices means that thousands more people will now face IHT this year compared to 2005. While average household wealth has increased from last year, so has the amount of liabilities meaning the possibility of an added burden of debt left to relatives in the event of a death.”
The research into IHT revealed 42 per cent of people with property above the IHT threshold had failed to take any steps to reduce the amount payable in IHT, with 23 per cent arguing that they were to young to think about the issue.
