Almost all advisers working with high net worth individuals (HNWI) believe those with a net worth of more than £2m will see an increase in taxes in the Budget, research from Wealth Club has shown.

Its study found that 60 per cent of financial advisers thought the upcoming Budget would definitely increase the tax burden on clients with a net worth of more than £2m.

A further 36 per cent said the wealthy would probably pay more tax after the Budget, while just 4 per cent thought there would be no increase.

More than half (51 per cent) of independent financial advisers (IFA) and wealth managers expected the freeze on income tax thresholds to be extended, 47 per cent believed further taxes on second homes and investment properties would be imposed, and 43 per cent expected an increase in capital gains tax (CGT).

Almost all (94 per cent) said they had seen clients with a net worth of £2m or more sell investments ahead of the Budget to avoid any potential increase in CGT.

Every IFA and wealth manager reported seeing more HNWIs taking out pension lump sums of up to 25 per cent due to rumours that the government may target this in the Budget, although these rumours have since been quashed.

Nearly four in 10 (39 per cent) wealth advisers had seen their clients taking between £200,000 and £268,275 as a pension tax-free lump sum in the past 12 months, or said they planned to do so over the next year.

Almost two thirds (63 per cent) of HNWIs were taking lump sums and putting it into inheritance tax portfolios designed to reduce tax.

“It’s evident that wealthier investors are bracing for a Budget that could hit their pockets hard,” commented Wealth Club founder and chief executive, Alex Davies.

“The overwhelming view among financial advisers is that the Chancellor is preparing to target those with higher levels of wealth - whether through a prolonged freeze on income tax thresholds, increases in capital gains tax, or extra charges on property and investment income.

“We are already seeing investors take pre-emptive steps. Many are realising gains early to secure current tax rates. Others have been withdrawing their pension tax-free lump sums amid concerns that the government might restrict how much can be taken, only to realise this is no longer on the cards.

“This really highlights how unhelpful - and potentially damaging to people’s wealth - the speculation has become, much of it seemingly driven by officials trying to gauge public reaction to possible tax rises.”

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