According to research by Scottish Widows, 41 per cent of people are now liable for a 40 per cent IHT bill upon their death, up from 34 per cent in 2005.
This figure represents 10million households and the lender has warned people that they need to be prepared or face passing on a huge tax bill to
their relatives.
Anne Young, tax expert at Scottish Widows, commented: “IHT is a tax that affects almost half of the country and it is really important that people prepare for the possibility of leaving a huge tax bill on their death. Gifting is becoming an increasingly recognised way to avoid IHT.
Scottish Widows found 43 per cent of those affected by IHT had taken steps to deal with it, with 44 per cent of these either giving an annual gift of up to £3,000 or a lifetime gift, averaging around £86,000.
Daniel Clayden, director at Clayden Associates, believed it was imperative people sought financial advice to plan for the future. He said: “The sad thing is this issue is not going to go away and it’s probably going to get worse. More people are getting caught out and even if they put the threshold up, as a percentage increase it doesn’t keep up with house price inflation. Everyone is banging the drum to try and get something done but the government is not going to scrap it when its deficit is so great.”
