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UK taxpayers are wasting billions of pounds due to poor inheritance tax planning according to Unbiased.co.uk.

The research shows that the overall amount of unnecessary inheritance tax payments will total £2.2bn this year. The website says this amount of wasted IHT payments has risen by 16% per cent compared to 2008, increasing by £314m.

It says that lack of IHT provision represents the biggest tax wastage in the UK and despite the housing market being in crisis; this trend looks set to continue with many properties still valued at more than the current IHT nil rate threshold of £325,000.

The research shows that one of the main causes of ‘death tax' wastage is the inclusion in personal estates of the proceeds of life assurance policies, which if written in trust, would not be subject to inheritance tax.

The easiest way to tackle the amount of money wasted on unnecessary tax payments is by talking to a financial adviser who can help you make the most of all your finances and all your assets.

David Elms, chief executive of Unbiased.co.uk says: "Our research shows that extraordinary sums are being lost from estates because the deceased has not made adequate provision for inheritance tax. This can prove an additional unwelcome stress for the deceased's family at an already difficult time, since this tax must be paid before the estate is released and any inheritance can be passed on. It is crucial that people see a financial adviser to discuss their tax liabilities. An adviser will ensure that all advice provided is appropriate for their client's personal and family financial situation."

SOURCE: Unbiased.co.uk, 11/05/09

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