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Survey shows widespread ignorance of IHT liability

Over two-thirds of people have no idea where they stand on the issue of inheritance tax, according to research from Alliance & Leicester.

Its quarterly wealth tracker index found that despite rising property prices which means that many people face potential IHT liabilities, 61 per cent of people had no idea what the current IHT threshold was. A further 16 per cent who hazarded a guess were nowhere near the correct figure of £255,000.

A&L found that women were less aware of the threshold than men, with 68 per cent of women and 53 per cent of men having no idea of the limit.

Eight per cent of people thought the limit was as low as £55,000 but hardly anyone believed the threshold was higher than it is, with only 2 per cent thinking that it is £355,000 and 1 per cent guessing £555,000.

On a regional scale, Scotland was the least knowledgeable about the limit, with 82 per cent not knowing, while the South-west of England was the most tuned in, with 35 per cent stating the correct level of the IHT threshold.

The survey was conducted among 2,000 people in July by RSGB Omnibus on behalf of A&L.

Product manager for investments Paula O&#39Reilly says: “As the value of property and other assets increases, IHT liability is something that a significant number of people will have to worry about.

“It is concerning that so few people are aware of the IHT threshold. With IHT charged at 40 per cent, anyone who is concerned that their total assets may exceed £255,000 should contact their financial adviser to discuss their individual circumstances.”

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