UK taxpayers are wasting millions of pounds due to poor IHT planning, according to annual research by Unbiased.co.uk .
The research shows that the overall amount of unnecessary inheritance tax payments totaled £1.9bn last year. This has risen by 24% compared to 2007, an increase of nearly £370m.
Unbiased says the lack of IHT planning leads to 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.
The 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 findings also show 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, just beaten by fuel duty, council tax and the TV license. Despite this dislike, four in five people in the UK admit to not having taken any steps over the last twelve months to reduce their tax burden.
"Our research shows that people are throwing away a whopping amount of money on unnecessary inheritance tax payments," says David Elms, chief executive of Unbiased.co.uk.
"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 Inheritance Tax is and how to minimise liability. To download a free copy of the brochure, visit www.unbiased.co.uk/taketaxaction .IFAonline
Joined as head of strategy, multi asset, in June
Group income protection
Nine in 10 do not have income protection
Set to become part of Single Financial Guidance Body