Planning ahead ‘could reduce IHT bill’

Posted 05/08/2009

People who want to avoid inheritance tax (IHT) have been advised to plan their finances accordingly.

According to independent financial adviser Equity Partners, a growing number of Britons now perceive IHT as a voluntary tax.

This, it said, is because people can avoid paying it if they plan ahead early enough and consider options such as gifting their inheritance.

However, the firm noted that a large proportion of the UK public are not sufficiently knowledgeable about issues such as different IHT bands.

This means that many could be unwittingly gifting sums that put them above the middle rate band and therefore increase their tax liability.

“It isn’t made clear at all,” observed Kevin Tooze, managing director at Equity Partners.

The comments come amid growing speculation that the Conservative Party may put back its pledge to raise the IHT threshold to £1 million if it wins the next general election.