Nine in 10 advisers are experiencing a surge in enquiries about inheritance tax planning ahead of this year’s Budget as demand for support on estate planning continues to expand, new research from investment manager Downing shows.
In Downing’s survey of UK financial advisers and wealth managers, 92% said they are seeing a rise in queries about IHT in the run-up to the announcement on 26 November, including 12% who are reporting a substantial increase.
Around two in five (38%) said this is mainly being driven by new clients, with 27% saying the increase is coming from existing clients.
Overall, one in three said it is a mix of new and existing clients.
Inherited pensions will be subject to IHT from 2027
Positively, enquiries are translating into business – 80% of those questioned say the proportion of their business accounted for by IHT has risen in the past year, with 13% saying it has increased substantially.
Those questioned expect it to continue to expand, with more than four out of five (81%) saying IHT planning and advice will make up 20% or more of their business in three years.
They expect the proportion of clients with a potential IHT liability to continue to grow too – currently more than four out of five (83%) estimate that up to 30% of their clients have an IHT liability, with (17%) estimating 30% to 40% have a potential IHT issue.
Around 40% of advisers said their clients are well-informed in general about IHT planning solutions, while 50% say clients are quite well-informed, with 10% saying clients are neither well-informed nor uninformed.
Mark Dunn, head of retail sales at Downing, said: “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.”
IHT raised a record £8.25bn for the government in the last financial year.
The Office for Budget Responsibility estimates IHT receipts will rise to another record of £9.1bn this financial year and hit £14.3bn by the 2029/30 tax year.
