According to a recent survey by Canada Life, estate planning to legitimately (and legally) avoid the payment of Inheritance Tax is big business and accounts for a quarter of advisers business.
Since 1998, Canada Life claim that house prices have doubled but that the Inheritance Tax threshold has only increased by 14%. This has meant that since Labour were voted in in 1997 the revenue raised from Inheritance Tax has grown by over 40%.
Apparently, the number of estates subject to Inheritance Tax has risen by almost 40% too.
Our View
There are many simple ways to plan your estate in order to avoid the need for your family to pay Inheritance Tax to the Government based on your estate. 40% is a lot of money to give to the Government for the pleasure of dying so why do so many people do nothing about it?
Planning for your future can be as simple as making regular gifts to your family each year. For every £1,000 you give away you could be making sure that £400 of it goes to your family, instead of the Government's coffers.