Women are more likely to pay too much in inheritance tax due to a lack of financial planning, research has shown.
More than half (53 per cent) of women plan on leaving an inheritance, but of this group, 55 per cent have not made any financial plans compared with 41 per cent of men, according to Fidelity International.
In a survey of 2,000 UK adults conducted between June 28 and July 2 by Opinium, 37 per cent of women said they didn’t understand the rules around inheritance tax, compared with 25 per cent of men.
Women are also less likely to make immediate plans to reduce their tax liability in the future.
Despite one in five, around 19 per cent, planning to gift part of their wealth to family or friends in the next five years, just over half (53 per cent) are unaware that the money will have to be given away seven years in advance of death to avoid paying inheritance tax.
In the UK women hold more wealth than men, with figures from the Office for National Statistics showing that female-owned estates that are liable for tax have an overall net capital value of £13.6bn, compared with £12.3bn for men.
According to Fidelity International, this translates to female estates being liable for £430m more in inheritance tax than male-owned estates.
This is most likely due to the fact that women have a higher life expectancy.
Dawn Mealing, head of advice policy and development at Fidelity International, said: “Out of those who are liable to pay inheritance tax, women’s net estates are worth £1.3bn more than men’s.
"Yet, almost half have done no financial planning to make sure this wealth is gifted the way they want - something isn’t adding up.”
She said when women outlive their male partners, they are making bigger decisions as they are responsible for both their own and their partner’s wishes.
“Without help from an adviser they could find themselves lost.”
Mealing gave some tips for women planning on leaving an inheritance:
sally.hickey@ft.com