Twenty-three per cent of people are aiming to give money away as part of an effort to manage their inheritance tax (IHT) bills, new research by Hargreaves Lansdown has indicated.

The investment platform’s findings also revealed that 18% of individuals said they would spend more money to avoid paying IHT, with 8% stating that they would give their home away.

Hargreaves Lansdown suggested the Government’s decision to include pensions in an estate for IHT purposes, a change due to be implemented from April 2027, has caused concern that families could be hit with higher IHT bills.

The study, which was based on a survey carried out by Opinium on behalf of Hargreaves Lansdown, also found that around one in three people (32%) said they didn’t know what they would do.

Head of retirement analysis at Hargreaves Lansdown, Helen Morrissey, commented that the Government’s IHT change on pensions had prompted more people to consider what they can do to manage any IHT bill that their families may receive.

“None of us know how long we are going to live or what the future may hold,” Morrissey said. “With this in mind, it is vital that you don’t overspend or give too much money away as there’s a chance you could do too much and leave yourself struggling later on. This is particularly the case if you end up needing care later on in life.

“It’s also important that any gifts you do make are handed over with full knowledge of the rules and how they work. If you were to sign over your house to loved ones, but continue to live in it rent free for instance, then they could still be landed with a shock IHT bill after you’ve gone.

“Similarly, if you are making use of the various gifting allowances available to you then it’s important to make careful notes of who has received what, so your loved ones have evidence if needed.”

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