According to research from bank Bradford & Bingley, only one in fifty people (2%) who think that they will be liable to pay Inheritance Tax (IHT) have planned ahead by taking steps to reduce its impact. What’s more, almost half of adults don’t know the current rate of IHT, and more than a quarter wrongly assume that they can settle any IHT bill from their inheritance.
A decade of rising house prices has pushed millions of individuals into the IHT bracket — even a modest home could gobble up the £285,000 nil-rate band for the 2006/07 tax year, with the remaining estate liable to Inheritance Tax at 40%. So, even if you’ve never paid higher-rate tax in your life, you could hand over two-fifths of everything you own over the nil-rate band when you die!…