IHT woes await middle Britain: Close Brothers

The regional head of advice at Close Brothers Asset Management said that, when it came to personal finances, those looking to pass on their wealth cannot let “inheritance fall under the radar.”

He said: “It can only be ignored for so long. With £75bn being inherited in the UK every two years, large sums of family wealth are left unnecessarily exposed to tax.

“A combination of planning inertia and a general lack of awareness is to blame, but it is crucial that those who will see their estates subject to the tax understand their liability.”

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This follows Close Brothers’ latest 7-page trends in wealth study, Heir Today: Gone Tomorrow, which revealed that less than half (47 per cent) of those liable for inheritance tax on their personal assets know the correct threshold. It also found that 14 per cent wrongly assumed that the threshold is £500,000 or higher.

Mr Haines added: “To ensure the smooth transfer of wealth to future generations, further education on tax saving measures and a much greater focus on early financial planning is essential.”

Recent figures from The Office for Budget Responsibility estimate that with the IHT threshold set at £325,000, the Treasury will see its tax take increase by 60 per cent over the next five years, from approximately £3.5bn in 2013/14 to £5.6bn in 2018/19.

This comes as a report on national salaries, published by sister paper the Financial Times, said that City workers’ salaries - at more than £100,000 a year on average - were now outstripping the professions, such as scientists, academics and engineers, at approximately £45,000 a year.

The report said that a ‘deep divide’ has emerged among Britain’s high earners, with some benefiting handsomely from globalisation, while others struggle to cling to a middle class lifestyle.