Advisers and wealth managers are reporting an increase in enquiries about inheritance tax (IHT) planning ahead of the Budget in November, with demand for support on estate planning continuing to rise, research from Downing has found.

The investment manager’s survey of advisers and wealth managers showed 92 per cent had experienced an increase in IHT-related enquiries in the run up to the Budget, including 12 per cent who reported a substantial increase.

Nearly two fifths (38 per cent) said the increase was primary driven by new clients, while 27 per cent stated it was mainly coming from existing clients, and 35 per cent said it was a combination of new and existing clients.

This surge in enquiries was leading to new business, with 80 per cent of respondents saying the proportion of their business accounted for by IHT had risen over the past year, including 13 per cent experiencing a substantial increase.

Advisers and wealth managers expected continued expansion, with 81 per cent saying IHT planning and advice would make up 20 per cent or more of their business in three years.

Furthermore, respondents anticipated the proportion of clients with a potential IHT liability to continue rising.

More than four fifths (83 per cent) estimated that up to 30 per cent of their clients had an IHT liability, while 17 per cent said between 30 and 40 per cent had a potential IHT liability.

Two fifths (40 per cent) believed their clients were generally well-informed about IHT planning solutions, while 50 per cent said clients were quite well-informed, and 10 per cent felt clients were neither well-informed nor uninformed.

“Growth in client enquiries about IHT planning solutions has increased materially since the last Budget introduced significant changes, and advisers and wealth managers are seeing a rapid rise in interest,” commented Downing head of retail sales, Mark Dunn.

“We believe that Downing is well-positioned to support advisers and help them navigate this complex area.

“It is understandable that enquiries are growing in the run-up to the 26 November, as more and more people are being caught within the IHT net due to frozen nil rate bands and the proposed pension reforms.

“It is interesting to see how important IHT planning solutions and advice are to adviser businesses. This underlines the need for more solutions to meet the needs of clients, many of whom are now looking for growth in Business Relief investments.”

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