Study reveals Inheritance Tax ignorance

New research has revealed a lack of awareness regarding Inheritance Tax (IHT) rules across the UK.

Research from insurance company, Canada Life, has revealed that more than half of adults surveyed were unaware that IHT is levied at a rate of 40 per cent in the UK.

Almost a quarter (24 per cent) of respondents admitted that they did not know if their main home was liable for IHT – whilst 42 per cent wrongly believed that ISAs were also free from the tax.

A further 28 per cent were surprised to learn that IHT was payable on cash savings and investments.

The insurer’s study also found that just under 60 per cent of adults were unaware that the individual IHT threshold per person in the UK, before tax is due, is £325,000.

Earlier this year, data from the Office of National Statistics (ONS) revealed that the Treasury received £4.6billion in IHT in the 2015/16 tax year alone.

Tim Martin a partner and Inheritance Tax expert with Moore Thompson, said: “The research suggests a serious lack of understanding of IHT rules.

“It also highlights the importance of seeking specialist legal advice for an in-depth analysis of your circumstances and IHT obligations, to ensure that you will leave behind a legacy for your loved ones rather than handing over more than is necessary to the taxman.”

For more information on inheritance tax planning and estate preservation, please contact us.