Need to know about inheritance tax? Here’s why you’ll want to ask a Geordie

Do you know what the inheritance tax threshold is? £1m? £150,000? According to a study out today, one in two people living in Britain today don’t have a clue.

 

For the avoidance of doubt, it’s £325,000 (well done if you got it right). Being left money over that level means you pay tax on it – at a rate of 40 per cent.  

 

In a poll conducted for Close Brothers, about 47 per cent of people asked knew the £325,000 threshold, while the rest said they either didn’t know or got the figure wrong.

 

More surprising is this chart.

 

 

Around 38 per cent of Londoners do not know the threshold, while the most knowledgeble region on inheritance tax was the north east, with over 55 per cent knowing the level. This is even more surprising given the vast amount of wealth swishing around the capital.

 

The findings underpin an important point. Latest data from the Office for National Statistics suggests at least £75bn is inherited by Brits every two years, meaning large sums of personal wealth are being left at the mercy of the taxman. Especially if people are so in the dark about when they will be taxed.

 

“When it comes to personal finances, those looking to pass on their wealth cannot let inheritance fall under the radar. It can only be ignored for so long,” Close Brothers Asset Management regional head of advice Patrick Haines said. 

 

“Further education on tax saving measures and a much greater focus on early financial planning is essential,” Haines added.