Half of all inherited shares were subject to inheritance tax (IHT) according the latest figures, prompting calls for people to manage their personal finances more efficiently.
Around £5.8bn of the £11.7bn of securities passed down were subject to IHT, according to data prepared by HM Revenue & Customs.
Experts highlighted money invested in Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) is not subject to IHT if held for more than two years.
“So much of the IHT paid out by those inheriting shares is unnecessary – there are simple steps to take that can lower or completely eliminate IHT liability,” said Kealan Doyle, the chief executive of Symvan Capital.
EIS are gaining popularity among wealthier individuals due to the ability to invest up to £1m per annum, reclaim 30 per cent of the cost of investments against income tax bills and not pay capital gains tax on investments after three years.
Symvan said £1.8bn was invested in EIS in the most recent numbers, which is the highest on record.
“The EIS and SEIS schemes are a win both for taxpayers and for small businesses. Individuals gain both a range of substantial tax advantages, and the opportunity to invest in high-quality, high-growth businesses," said Doyle.
"At the same time, small businesses get access to long-term investment that has been in much shorter supply since the credit crunch.”