Consumers 'not taking action to reduce IHT payments'

02-Apr-2007

Some 74 per cent of UK consumers have not taken any steps to reduce their overall tax payments, according to IFA Promotion (IFAP). One way of achieving this could be to offer financial gifts to would-be first time buyers.

IFAP states that consumers are wasting £1.5 billion in inheritance tax (IHT). This could be reduced if people utilise the annual amount of money they are able to offer as a gift - which could be given to family members looking to become first time buyers.

The research also shows that IHT is the second most resented tax in the UK, with total spending on the levy reaching £3.5 billion in 2006.

David Elms, chief executive of Unbiased.co.uk, the group's consumer website, commented: "Our research shows that people are throwing away a huge amount of money on unnecessary inheritance tax payments.

"IHT liability is paid by beneficiaries, often at a time when they are grieving over a lost friend or family member."

He added that people should contact their independent financial adviser to find ways to limit their IHT expenditure.

Under the current regulations, there is an annual IHT exemption for gifts of £3,000 – money that could be given to offspring looking to get onto the property ladder.

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