The annual research by Canada Life, called the IHT Monitor, found 70% of people aged over 45 with assets more than £325,000 did not know the threshold for the standard nil rate band (£325,000), up from 61% in 2016.
Additionally, 55% of people do not know the rate at which assets above the nil rate threshold are taxed, this is up slightly from 52% in 2016.
Government windfall
A Canada Life spokesperson says this confusion may be leading to families being faced with unexpectedly high tax bills.
“The results underline the increasing revenue the government is receiving from inheritance tax.”
Latest figures show receipts from IHT have hit a record high, with consumers paying £4.84bn of IHT in the 2016/17 tax year, double what it was seven years earlier at £2.4bn in the 2009/10 tax year.
Karen Stacey, head of distribution services at Canada Life, said unless people learn more about taxes and actively plan the future of their estate, the government is in line for large and ongoing windfalls.
“There is a disturbing lack of knowledge which will undoubtedly translate into unnecessarily high inheritance tax bills.
“For many people, their single largest asset is their house – it’s what they have worked their entire life to own and many have benefited from an extraordinary increase in its value.
“Their hopes for securing their children and beneficiaries’ financial futures rest on being able to pass on as much of its value as possible,” Stacey said.
