The general public is confused about how inheritance tax works, according to a poll conducted by accountancy firm Grant Thornton.

Research by the organisation found 62 per cent believe they are liable to pay the tax, when in effect it only applies in around two per cent of cases, reports Accountancy Age.

Francesca Lagerberg, head of tax at Grant Thornton, explained there is a feeling of "dissatisfaction" relating to inheritance tax among the public.

Some 41 per cent of the respondents to the survey stated they would support a move to replace inheritance tax with new green taxes.

But the least popular suggestion was to cancel it in order to introduce additional taxes on wealth.

Plans were recently discussed in the House of Lords for possible changes to inheritance tax, with opposition Treasury spokesman Lord Eatwell claiming it should be charged to individual recipients rather than on an estate, reported This is Money.