Advisers 'must be wary of IHT hit on tax-free savings'

The firm says advisers should warn clients that, although ISAs and PEPs are free of income and capital gains tax, they do form part of the estate for IHT on death. It points out that, should a consumer’s estate be valued above £312,000 – the nil rate band for 2008/9 – they will be taxed at 40% on assets beyond this amount. Aegon research suggests a client could have amassed more than £360,000 in a PEP or ISA since that type of investment was launched over 20 years ago. Margaret Jago, technical manager at Aegon Scottish Equitable, says: “Financial advisers have a central role to play here...