Scottish Widows research reveals that in order to avoid a huge tax bill on their death, Brits are planning on giving away £103 billion to friends and family.
Ten million households now have an estate liable for a 40 per cent tax bill on their death up from a third last year.
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Of these, four in 10 people have taken, or plan to take, steps to mitigate this bill, with 44 per cent planning on giving away either a lifetime gift, or an annual gift to friends and relatives. The average amount people are prepared to gift is £86,000.
Almost half would like their gift to be used to help their relatives get on the property ladder. One in five want their beneficiaries to use the gift for their own retirement, and a further 22 per cent would like recipients to save it for their own children.
Anne Young, tax expert at Scottish Widows, said: IHT is a tax that affects almost half of the country and it is really important that people prepare for the possibility of leaving a huge tax bill on their death.
Gifting is becoming an increasingly recognised way to avoid IHT, but remember few gifts are totally exempt. You can give £250 away to an unlimited number of people as well as up to £3,000 per tax year these will all be exempt. In addition, if you live for seven years after making any other absolute gift, this will be exempt to.
Trusts are also a viable option for those wishing to protect their assets, and four in 10 people who intend to take, or have already taken, steps to reduce their inheritance tax bill have looked at the option of a discretionary will trust or a life assurance policy written under trust.
However, for the majority that havent considered this option, nearly a third admit to not knowing enough about them, and one in 10 has never heard of trusts.
Young said: People want to leave their family with as much of their assets as possible, and although people are making headway in recognising this, they could still be facing a major problem.
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