Inheritance tax (IHT) is a problem facing an increasing number of people, but popular methods of avoiding the tax burden are not always viable in every case, one commentator has stated.
Clerical Medical has expanded on its observation that consumers should seek advice about IHT, saying that making gifts is not always possible or favourable.
Nick Williams, chartered tax adviser at the firm, states: "Many people will be faced with the classic inheritance tax dilemma: they have an estate worth more than the nil rate band but can’t make a gift of capital as they rely on it and the income it generates."
He suggested that a number of options remain open to such consumers to mitigate liability, such as the creation of a loan trust, a discounted gift and income trust, or establishing a life insurance policy.
Inheritance tax is currently levied as a rate of 40 per cent of all estates exceeding an exempt band of £300,000, although this is set to be raised to £350,000 by 2010.