'More people falling into IHT trap'

As increasing numbers of people across the country fall foul of the inheritance tax threshold, one finance provider is urging them to evaluate what will happen to their estate.

Building society Bradford and Bingley has noted that rising house prices mean that more and more people will find that their estate exceeds the £300,000 bench mark above which IHT applies.

It also states that the Treasury estimates it will reap a record £3.6 billion as a result of the tax this year, compared with £2.9 billion in 2004-05.

The firm suggests that a number of moves, such as setting up gifts to friends or family or setting up trusts, can help to mitigate the impact of the tax.

Andrew Stead, head of wealth at Bradford & Bingley, commented: "Planning what will happen to your estate sounds like a depressing thought, but what is even more depressing is the amount of tax your estate could be subject to if you don’t start planning now."

Recently, Standard Life welcomed a move by HM Revenue and Customs to simplify the IHT reporting process, saying that it represented a "positive step" for taxpayers.