British taxpayers threw away a total of £1.9 Billion last year through paying unnecessary Inheritance Tax
As well as wasting billions bailing out banks, British taxpayers are wasting more money on IHT payments than any other tax, with 82% of people with an IHT liability having taken no steps to reduce their overall tax payments. Research shows that the overall amount of unnecessary inheritance tax payments totaled £1.9 billion last year. The amount of wasted IHT payments has risen by 24 per cent compared to the previous year, 2007 equalling an increase of nearly £370 million.
Lack of IHT provision represents the biggest tax wastage in the UK and, despite the recent falls in the housing market, this trend looks set to continue with more properties now valued at more than the current IHT nil rate threshold of £312,000 than ever before.
In the current climate everyone should think sensibly about how to avoid wasting money through paying unnecessary tax. Research shows that 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. Come on people, that's just paperwork !
People are throwing away a thumping amount of money on unnecessary inheritance tax payments. IHT liability is paid by beneficiaries, often at a time when they are grieving over the loss of a loved one. Without advance 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. It is entirely legal to mitigate inheritance tax.
Roy Jenkins the former Labour Chancellor of the Exchequer famously described IHT thus:
"... it is, broadly speaking, a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue..."
More advice on Inheritance tax planning