Almost eight out of ten people feel inheritance taxes are unfair, according to research commissioned by Friends Provident. Despite Gordon Brown’s decision to raise the threshold from £263,000 to £275,000, 67 per cent of people still believe it should be set at a higher level. Soaring house prices over the past ten years mean that more people are now caught in the inheritance tax trap. The FTSE 100 financial services group found that 64 per cent feel the tax should simply be scrapped altogether.

“The majority of families will now find themselves drawn into the inheritance tax net because of the housing boom in recent years,” said the head of investment marketing at Friends Provident, Ian Jefferies. “That is why inheritance tax planning should be a key consideration for those families who until recently were not liable for this tax. “At present, the tax is paid at a flat rate of 40 per cent if the house sells for more than £275,000, irrespective of how much wealth the beneficiary has. If the tax has to stay, 76 per cent say they would prefer to see a banded system similar to income tax.