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Aegon warns IFAs on inheritance tax threat of isas and peps

Aegon Scottish Equitable is warning advisers to be aware of their clients’ potential inheritance tax liability on large portfolios of tax free savings such as peps and isas.

People who have invested in tax free-savings products for many years may find that the assets they have amassed exceed the £312,000 nil band rate and are therefore liable to pay 40 per cent inheritance tax on death on assets above this amount.

The Company has calculated that an individual who has taken a pep or isa allowance since their launch in 1987 would have amassed around £360,000 assuming their investments had grown at the same rate as the average unit trust.

Aegon Scottish Equitable technical manager Margaret Jago says: “Many people are not aware that although peps and isas are tax free, they are not exempt from inheritance tax. Financial advisers have a central role to play here in calculating the value of their clients portfolio and advising them accordingly.”



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