Will and probate advisers divided over IHT

Proposals from the Institute of Public Policy Research (IPPR) that inheritance tax (IHT) should be scrapped have proved controversial and are still dividing financial advisers.

The IPPR suggested that there should not be a tax on the gifting of inheritance, but rather the receipt.

People would be able to have a tax free inheritance limit of £150,000 if the capital receipts tax is adopted.

Economist Tony Dolphin told Citywire.co.uk: "IHT is on its last legs."

However, others do not believe that the capital receipts tax should be implemented.

Financial expert Clive Barkwell believes that if this policy came into force it would see wealthy UK residents with few offspring being unfairly penalised.

Mr Barkwell said: "If you have ten people to give money to then this will work for you but if you have just one person then you would be disadvantaged."

In addition, from April this year the Inland Revenue will implement a scheme where people will be legally required to disclose setting up trusts for possessions and property for the purpose of determining inheritance tax, the Financial Times reported.

Published by Tessa Jones