Nearly a quarter (23 per cent) of UK adults plan to increase their gifting in a bid to manage their inheritance tax (IHT) bills, research by Hargreaves Lansdown has found.

The firm noted that IHT concerns, following the announcement that pensions would be included in estates for IHT purposes from April 2027, were prompting more people to consider what they can do to manage IHT bills.

A further 18 per cent of respondents said they planned to spend more money to avoid paying IHT, while 8 per cent said they would give their home away.

Almost a third (32 per cent) stated they did not know what they would do when it came to managing their IHT bills.

Commenting on the findings, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said: “IHT worries have loomed large since the government announced pensions would be included in people’s estates for IHT purposes from April 2027.

“Pensions can be one of our biggest assets and so we will see more people facing inheritance tax in the years to come.

“The news has prompted more people to consider what they can do to manage any inheritance tax bill that their families may receive.

“None of us know how long we are going to live or what the future may hold. 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.

"This is particularly the case when it comes to gifting out of surplus income. This enables you to give away as much income as you want without incurring IHT, but you need to adhere to strict rules – for instance gifts must come from income, not capital and must be made on a regular basis without impacting your own standard of living.

“Careful notes should be made that enable your family to prove that you’ve met these rules in case questions are asked and, if in doubt, financial advice should be sought to make sure you are understanding the rules correctly.”

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