Why do many people fail to plan for inheritance tax?

More than 3 million people expect to exceed the inheritance tax threshold of £325,000, but 74 per cent have not set up any means of mitigating the charge, a survey by Investec Wealth & Investment has warned.The survey found that 37 per cent did not want to lose access to their investments, 34 per cent were put off by the cost and 30 per cent were banking on the seven-year wait before their assets escaped IHT.A third of respondents questioned why they should have to wait seven years at all. The poll of 1460 adults aged 35 found that as a result; 2.5m face a potential IHT bill.Barry Anysz, directorof Investec Wealth & Investment, said: “Trusts have traditionally been used to shelter assets from IHT but many investors rule them out because they do not want to lose access to their investments.“On average, people only consider starting to make inheritance tax plans when they are aged 67. The older you get the more important it is to have access to your investments in case circumstances rapidly change. For example, people may end up having to use assets that had been earmarked for the next generation to pay for long-term care instead and extricating these from a trust can be complex and very expensive.”“Everybody wants access to their capital and income and not to pay inheritance tax, it is difficult without financial planning, and any IHT solution is a compromise.”As always experienced independent fee based financial advice is essential in this complicated planning area.