Advisers are increasingly looking for support around inheritance tax (IHT) planning amid growing demand for advice, a new study by investment manager Downing has shown.
The firm’s survey of financial advisers and wealth managers revealed that more than half (51%) would value more support from providers of specialist IHT planning solutions. The vast majority (93%) said that their firm already works with lawyers or accountants for additional expertise.
Last month, HMRC announced that IHT had raised £7.6bn through 11 months of the 2024/25 tax year, surpassing the £7.5bn raised across the whole of 2023/24 with a month to spare.
Following changes to IHT in the Chancellor’s Budget last October, more estates could be dragged into the IHT net in the coming years.
Rachel Reeves extended the freeze on IHT thresholds at £325,000 plus £175,00 if a home forms part of the estate by two years until 2030. She also announced changes that will see pensions included as part of an estate, and an adjustment to the potential tax relief available on business relief qualifying assets.
Downing’s research, based on 100 UK financial advisers and wealth managers, found that 42% of advisers already receive support from specialist IHT providers while 50% work with both accountants and lawyers to source additional expertise. Around 40% work just with accountants, while 3% work solely with lawyers and a further 6% plan to work with accountants or lawyers in the future.
Four out of five (81%) advisers questioned employ specialists who only advise on IHT planning and more than half (52%) believe their firm is very experienced on IHT planning solutions. However, 45% described themselves as only quite experienced, while 3% admitted they are not very experienced.
Head of retail sales at Downing, Mark Dunn, said: “IHT planning is growing in prominence as part of advisers’ workload and as part of their client base as more clients focus on tax efficiency.
“That is highlighted by how many firms employ specialists who only focus on IHT planning and the growing business relationships with lawyers and accountants to source further expertise.
“It also explains the demand from advisers for more support from providers of specialist IHT planning solutions. Providers need to work harder to ensure advisers receive the help they need.”
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