Over four in five (81%) advisers and wealth managers expect the proportion of clients using business relief for inheritance tax (IHT) planning to increase, Downing has found.

The investment manager’s latest research also revealed that 10% are predicting a "substantial rise" in the number of clients using business relief.

Downing’s study of 100 UK-based financial advisers and wealth managers comes after speculation before the Autumn Budget, which suggested the business relief could be scrapped completely, leading to many clients ditching their existing plans.

It found that 14% of advisers had seen substantial numbers of clients pull out of schemes, whilst a further 73% had seen some clients abandon the business relief schemes they were invested in.

Just 12% said that speculation had no impact on its clients.

The Autumn Budget scrapped the 100% business relief currently available from 2026, so that 20% IHT is paid on the first £1m of qualifying business and agricultural assets, plus the current nil rate band worth up to £500,000 per individual.

Downing’s research found that 59% of advisers stated that up to 20% of their clients planning for IHT use business relief schemes, with a further 33% estimated that between 20% and 30% of their IHT planning clients use business relief schemes.

The study also found that most advisers split the number of providers they use when advising on business relief solutions. One in five (20%) only use one provider, while 64% use two and 13% split across three or more.

Head of retail sales at Downing, Mark Dunn, said: "The Budget decisively ended the uncertainty over business relief enabling advisers and providers to plan for the future.

"Business relief plays an important role in helping growing businesses to access funding while also enabling people to plan for any IHT liabilities they may have.

"Speculation before the Budget that business relief could be scrapped entirely had a major impact as demonstrated by the research showing that advisers saw some clients pulling out of schemes, they had invested in."

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