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1.6Bn down the IHT drain

Tax net widening to cover 3.6 million people by 2009

People will waste 1.6bn through poor inheritance tax planning this year, a rise of 400m on last year, says IFA Promotion.

The IHT net will catch 3.6 million people by 2009, says accountants Grant Thornton.

Grant Thornton, with Lombard Street research, says the figure shows a 70 per cent rise from 2002, when the threshold caught 2.1 million people.

IFAP warns that it is not just the wealthy who are being stung by the tax. Chief executive David Elms says seeking advice is critical to make informed choices and minimise IHT exposure. It is offering a free guide for IFAs to define IHT, explain planning, will-writing and alternative investments.

Elms says: “People need to be aware that the IHT threshold has failed to rise in line with soaring property prices. It is vital that people seek advice from an IFA so they can make informed decisions on IHT planning and avoid wasting their precious inheritance.”

Grant Thornton head of private client services Ian Johnson says: “Death has long been deemed a convenient way to raise tax on the value of a deceased person’s assets or estate. The tax is easy to collect and complications arising from valuations are less likely to be contested but this is no longer just the domain of the rich.”

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