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IFAs are best when planning for IHT

Poor Inheritance Tax planning will cost UK adults £1.3bn this year, research by reveals.

Although the research also finds people are improving the way they plan when it comes to IHT liabilities, it warns that because house prices are rising at a much faster rate than the IHT threshold, any gains from this improvement could be temporary.

The website, which promotes the benefits of independent financial advice, says the most widespread cause of IHT tax wastage is the inclusion of the proceeds of life assurance policies in personal estates. It says if these were written in trust they would not be subject to IHT.

Such errors are thought to account for up to £119m per year in unnecessary tax wastage.

But far more tax waste results from a lack of IHT planning within personal estates. The value of this waste has been quantified at £1,184m for this year alone.

David Elms, chief executive of, says: “Our research demonstrates that although people are improving the way they plan for IHT, they still have some way to go.

“Property prices have outstripped the IHT threshold in the past few years and this tax is now a genuine concern for most home owners in this country.”

He adds: “It is vital that people seek advice from an independent adviser so they can make informed decisions with regard to IHT.”

Paul Wilcox, chairman and technical director of The WAY Group, an IHT planning product provider that works through IFAs, says: “Getting advice on minimising the effect of IHT from IFAs is important because they are not tied to a certain product or strategy.

“IHT planning is becoming more sophisticated and it requires the skills and lack of bias of an IFA.”


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