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Over 55s failing to reduce their IHT bills

22 May 2019

The majority of over-55s are not utilising the wealth of options available to reduce the inheritance tax bill on their estate, new research from Canada Life has shown.

According to the findings, less than two in five (35%) UK adults aged 55 and over have given or plan to give gifts that they would have otherwise left as inheritance. The remaining two thirds (65%) say they have not and do not plan to.

Even among those earning over £45,000, who will be more likely to have estates liable to fall into the IHT trap, 38% have not given gifts and do not plan to.

The research follows HM Revenue & Customs’ announcement of record inheritance tax receipts for the last tax year. Rising house prices have fuelled a rise in IHT receipts over the past decade, which almost doubled between 2010 and 2018.

Neil Jones, wealth management and tax specialist, Canada Life, said: “With the wide range of planning solutions now available, there is no reason why benefactors can’t maximise the value of their estates that are passed on. But our research and inheritance tax receipts show many people are simply not taking advantage of these opportunities.”

He said: “It’s crucial to use reliefs, exemptions and allowances” and “starting any planning early is essential”, pointing out that there are a range of trusts available that can enable clients to make sure more of their money goes to their beneficiaries whilst reducing the amount of tax payable when they die. “Re-ordering the way you disinvest can also bring about significant benefit from an estate planning perspective,” Jones added.


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