Tax
Inheritance tax: Too much waste |
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| Tax | |
| Written by Roberta Murray | |
| Tuesday, 27 April 2010 | |
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UK taxpayers will waste nearly £2 billion this year due to poor inheritance tax planning.
Inheritance tax could be being wasted to the tune of £2 billion a year due to poor tax planning. This meanS far fewer people would have to pay it. In addition, while one in three Britons (31%) predict substantial tax hikes post the General Election, 86% admit to doing nothing to reduce their tax burden. • Inheritance tax is Britain’s second biggest tax wastage area • Over a third of consumers (35%) support the Tory pledge to raise IHT threshold to £1 million • Despite one in three Britons (31%) predicting substantial tax hikes post the General Election, 86% admit to doing nothing to reduce their tax burden Lack of IHT provision represents the second biggest tax wastage area in the UK. This figure could be set to increase as this year’s Budget announced the IHT threshold would be frozen for the next four years at £325,000 – rather than rising in line with inflation. Unbiased.co.uk’s annual Tax Action campaign aims to help people recognise their tax liabilities and take steps to avoid unnecessary tax payments. The research shows one of the main causes 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. Karen Barrett, Chief Executive of unbiased.co.uk, commented: “With Tory plans to raise the inheritance tax threshold to £1 million, IHT is now a key topic on the election agenda. Our annual Tax Action report shows that vast sums are being lost from estates every year because the deceased had not made adequate provision for inheritance tax. Such situations can only bring additional unwelcome stress for the deceased’s family at an already difficult time, as this tax must be paid before the estate is released and any inheritance can be passed on. “In order to protect your family and loved ones, it is essential to have provisions in place after you’re gone. The easiest way to prevent unnecessary tax payments such as IHT is to visit an independent financial adviser who specialises in tax planning advice. An IFA will ensure that all advice provided is appropriate for your personal and family financial situation.
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