ISA savers are largely unaware of the savings vehicle's inheritance tax (IHT) status and risk having to pay out large amounts on death, a survey from Octopus Investments reveals.
The firm said "few people" understood the rules and urged savers to consider investing in AIM to limit future IHT costs. Some 54% of people it surveyed did not know if ISAs were exempt from IHT. A fifth (21%) thought, wrongly, that they were. It said a quarter (25%) of those polled knew ISAs form part of a person's taxable estate and could, therefore, be subject to IHT. A second survey, this time of financial advisers, showed three-fifths (59%) thought their clients were fully aware of the rules and realised that ISAs were taxable on death. The taxman collected almost £4.9bn in IHT...
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