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UK tax payers waste more on IHT payments than any other tax

20th January 2009 Print
UK taxpayers are wasting millions of pounds due to poor IHT planning according to annual research by Unbiased.co.uk, the website promoting the benefits of independent financial advice.

The research shows that the overall amount of unnecessary inheritance tax payments totaled £1.9 billion last year. The amount of wasted IHT payments has risen by 24 per cent compared to the previous year, 2007 equalling an increase of nearly £370 million.

Lack of IHT provision represents the biggest tax wastage in the UK and despite the housing market in crisis; this trend looks set to continue with more properties now valued at more than the current IHT nil rate threshold of £312,000 than ever before. Unbiased.co.uk's research is part of its annual campaign, TaxAction, which aims to encourage people to think sensibly about how to avoid wasting money through paying unnecessary tax. The research shows that the main cause of "death tax" wastage is the inclusion in personal estates of the proceeds of life assurance policies, which if written in trust, would not be subject to inheritance tax.

Unbiased.co.uk's research also shows that IHT is the fourth most resented tax amongst the British public, beaten to the top spot by fuel duty, council tax and TV license fee. Despite this dislike, four in five people (82 per cent) in the UK admit to not having taken any steps over the last twelve months to reduce their tax burden.

The fastest way to tackle the amount of money wasted on unnecessary tax payments is by searching for an independent financial adviser in your area who specialises in giving tax planning advice.

David Elms, Chief Executive of Unbiased.co.uk, commented; "Our research shows that people are throwing away a whopping amount of money on unnecessary inheritance tax payments. IHT liability is paid by beneficiaries, often at a time when they are grieving over the loss of a loved one. Without advanced tax planning, increasing amounts of IHT will fall into the hands of the tax man. It is crucial that people see an independent financial adviser to discuss their tax liabilities remembering that it is legal to mitigate inheritance tax. An IFA will ensure that all advice provided is appropriate for their client's personal and family financial situation."

With this in mind, Unbiased.co.uk has produced a brochure which explains what exactly Inheritance Tax is and how to minimise your liability. To download a free copy of the brochure and find details of local independent financial advisers (IFAs) who can advise on your IHT options, visit unbiased.co.uk/taketaxaction . Details of local IFAs are also available by going to Unbiased.co.uk.