Subscription
This site is FREE for all registered readers. Please input your details below for instant access.

Data Use:
We will also send you our free daily email newsletters and other relevant communications, which you can opt out of at any time. Thank you.

Advisers see surge in IHT advice demand

Advisers have reported a surge in demand for inheritance tax (IHT) planning advice, with new clients accounting for most of the enquiries, research by Downing has found.

The investment manager’s survey of UK financial advisers and wealth managers revealed that 43 per cent said enquiries are mainly coming from new clients, while 17 per cent stated that enquiries are mainly coming from existing clients, and 39 per cent said it’s a mix.

Downing found that enquiries were already rising before the Autumn Budget in October, with 84 per cent of advisers reporting a rise in enquiries in the past 12 months, and 24 per cent seeing a substantial increase.

In the Autumn Budget, the IHT threshold was frozen at £325,000, plus £175,000 if a home forms part of an estate, until 2030. It also included pensions as part of an estate, subject to consultation.

Since the Budget, 94 per cent of advisers and wealth managers have seen a rise in clients asking about IHT planning, with a third (32 per cent) seeing a substantial increase.

Furthermore, 91 per cent expect a rise in IHT enquiries in the next 12 months, with almost half (46 per cent) forecasting a significant increase.

The Chancellor also changed the potential tax relief available on business relief qualifying assets. Currently, all business relief assets benefit from 100 per cent IHT relief.

After April 2026, unlisted business relief assets and agricultural relief assets will benefit from a £1m allowance, where the assets will continue to benefit from 100 per cent IHT relief. Thereafter, the tax relief will be reduced to 50 per cent (an effective IHT rate of 20 per cent). AIM-listed shares will not have the £1m allowance.

Currently, 61 per cent of advisers and wealth managers estimate 20 per cent or more of their business is accounted for by IHT planning and advice.

Within three years, 85 per cent estimate 20 per cent or more of their business will be driven by IHT planning and advice.

Downing head of retail sales, Mark Dunn, stated: "Advisers were reporting big increases in the number of clients enquiring about IHT planning and advice before the Budget and are expecting further increases in the coming years.

"IHT raised £7.5bn in the 2023/24 tax year compared with £7.1bn in the previous year and receipts are forecast to continue to rise, with the Budget changes expected to further increase the number of estates affected by IHT.

"It is clear the demand is coming mainly from new clients rather than from existing ones wanting further advice to adapt to proposals in the Budget. That is driving demand from advisers for support from providers of specialist planning solutions."



Share Story:

Recent Stories



FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.