New research this week has suggested that Brits are wasting up to £450 million a year through poor inheritance tax planning.
A person with an estate worth more than £325,000 can lose up to £40,000 on a life insurance payout of £100,000 if they fail to place their policies ‘under trust’, according to research from Unbiased.co.uk.
Karen Barrett, chief executive at unbiased.co.uk, said, “Ensuring your life insurance payout no longer forms part of the estate is one of the simplest and most effective ways of avoiding ‘death tax’ wastage.”
She added, “It also reduces the legal loop holes which beneficiaries are usually faced with thereby making it both quicker and easier to distribute the money to the right people.”
The research, carried out for Unbiased.co.uk’s annual Tax Action campaign, found that 85 per cent of Brits have done nothing to reduce the amount of tax they pay in the past 12 months, whilst 27 per cent claim they do not know how to go about being more tax-efficient.
Unbiased.co.uk says it is running the Tax Action campaign to educate people about tax planning and “to help consumers think sensibly about their tax liabilities and take steps to avoid unnecessary tax payments”.