Inheritance tax limit 'too low'

MOST of the people in the country believe the recent rise in the inheritance tax threshold did not go far enough, according to research published today.

Nearly seven out of 10 people questioned said they thought the level at which people start paying tax on inherited wealth should be higher.

Chancellor Gordon Brown raised the threshold from £263,000 to £275,000 in his March Budget after soaring house prices sucked millions of people into the tax net over the last decade.

Today's study, by insurarce comapny up Friends Provident, showed just 19% of those questioned believed the level was right, while 76% believed the system should be banded in a similar way to income tax. Some 64% said they should be able to pass on the total value of their main home to their family without paying tax.

Despite the survey findings, fewer than one in 10 people said they had sought professional advice about how to minimise their family's inheritance tax liability.

Ian Jefferies, head of investment marketing at Friends Provident, said: 'The majority of families will find themselves drawn into the inheritance tax net because of the housing boom in recent years. That is why inheritance tax planning should be a key consideration for those families who, until recently, were not liable for this tax.'

The online study was carried out by YouGov on behalf of Friends Provident. More than 2,000 people from across the UK were questioned.