Inheritance tax is one of the more controversial elements in many budgets - to some, it's a reasonable contribution paid by those who are passed down money by the richest people, while others see it as a levy on hard work, taking from grieving relatives.

It currently raises around £7bn a year for the government, and in the last few years figures show that the tax is paid by between 5-7% of estates.

But it's often in the headlines as any more people than this believe their family will have to pay the tax after their death. A poll for The Times newspaper in July 2023 suggested a 33% thought they would be liable.

David Alexander, wealth manager and founder of The Legacy Hub, says: “All this talk of increasing taxes, and freezing thresholds might seem daunting and hard to digest.

“In truth only about five to seven per cent of estates in the UK actually end up paying IHT. This is however likely to increase if the government keeps freezing the threshold.

“Thresholds exist and each person has a nil-rate band (£325,000) - where they will pay no tax. If leaving a home to children or grandchildren, there is a residence nil-rate band (£175,000) also. Combining both thresholds means that many estates under £500,000 pay no IHT.”

A new poll says 12% of UK adults want to see no further changes to inheritance tax rules, including no cap on lifetime gifting. This view peaks among those aged 60-78 (16%) and those aged 79 (15%).

Chase data also reveals it’s far more of a priority for parents (29%) than those without children (9%) as adults consider their legacies.

Shaun Port, Managing Director for Daily Banking at Chase, says: “Parents are hoping the Chancellor avoids tampering with inheritance tax rules so they can pass their legacy onto the next generation without any extra sting in the........

© South Wales Argus