One in 10 people estimate the value of their estate, including their property and other assets such as savings and investments, jewellery and cars, at between £300,000 and £500,000. This puts them firmly above the threshold, according to insurer Friends Provident.
Almost a quarter of the 3,200 people surveyed believed their wealth could be between £100,000 and £300,000, potentially leaving their estate open to tax. Tax experts Grant Thornton predict that 3.6m estates will have to pay IHT by 2009.
People continue to be confused by inheritance tax rules, with only 39% aware that the current threshold is £285,000 and just over a quarter aware that estates over this value will be taxed at 40%.
Similarly, 39% of people know that gifts or transfers to family and friends made at least seven years before the benefactor dies will not be liable for tax. But only 28% realise that people can give up to £3,000 each year tax-free. A small minority, 6%, have started moving their assets onto their nearest and dearest.
