Consumers ‘should seek advice on how to avoid inheritance tax’

While there are "many ways" to avoid paying inheritance tax (IHT), individuals "do need to take advice" on the matter, an independent financial advisor has asserted.

Keith Thomas, director of investment services at Blackadders, noted a number of ways in which consumers may reduce or eliminate the tax payments, including giving small unlimited gifts of up to £250 per tax year and adjusting wills.

He noted that IHT is a "very emotive" tax and that many consumers believe that it is not going to affect them.

"Providing individuals take advice and gift within the confines of the existing legislation there is no need not be a problem," he added.

IHT is a tax charged at 40 per cent on the estate of a deceased individual which is valued above a threshold of £300,000.

In his last Budget as chancellor of the exchequer, Gordon Brown announced plans to increase the IHT boundary to £350,000 by 2010.