HMRC time limit explained as 'you may not realise' you have to pay this tax

People planning their financial affairs need to plan several years in advance to avoid paying a hefty 40 per cent tax bill. More families are becoming subject to inheritance tax (IHT), as general inflation and rising house prices means the value of people's estates is going up, with more people crossing the tax-exempt thresholds to have to pay the levy.

Lorraine Wilson, principal associate in the private wealth team at national law firm Weightmans, warned that ever more people are being dragged into paying the tax "without realising it".

She said the tax is not just for the wealthy, as more families are crossing over into being liable for the tax. This can be simply because your house has increased in value, or as you have built up investments or savings over time.

Each person has a standard tax-free allowance of £325,000 in total assets they can pass on when they die, with an extra £175,000 allowance if you are passing on your main residence to a direct descendant.