Inheritance Tax - why it pays to know the facts

87% of adults looking to distribute their estate to loved ones have no inheritance tax (IHT) strategy in place, according to research.

Financial adviser Drewberry polled 3,000 people and found 39% plan to leave assets to their families, while only 13% tried to find if they had any inheritance tax liability.

42% said leaving assets to loved ones ”would be nice” but not a priority, whereas 16% don’t expect to have any assets left to pass on when they die.

Regarding their IHT liability:

  • 87% incorrectly thought their pension savings would attract IHT
  • 12% believed their house would be exempt from IHT
  • 10% mistakenly believed cash and ISA savings are also exempt from IHT.

Looking to the future, 30% expect to inherit £50,000 or more from older relatives during their lifetime.

1 in 5 adults in their 40s and 50s expect to inherit assets over £100,000, while only 3.7% believe they will inherit assets in excess of £400,000.

Lentells are able to advise on all aspects of IHT, for more information please go to http://www.lentells.co.uk/services/personal/estate-planning