Wealth manager Rathbones has reported a surge in client queries about estate planning amid concerns of possible changes to the inheritance tax (IHT) regime.

An increasing number of Rathbones clients were already reassessing how to manage the transfer of wealth to the next generation following the IHT changes announced be the Government last year.

Among these changes were the inclusion of pensions in IHT calculations from April 2027, as well as reforms to agricultural property relief and business relief.

Rathbones suggested that speculation around the Autumn Budget has set in train a fresh wave of questions from those tackling estate planning.

With the ongoing freeze on both the main IHT nil-rate band and the residence nil-rate band, more estates have become liable for IHT, or are facing higher tax bills, even before the latest policy changes are considered.

Head of advice at Rathbones Private Office, Simon Bashorun, commented: “The freeze in IHT nil-rate bands has put families on a treadmill of rising IHT liability, even before any further changes are made. While speculation around the Budget is understandable, making snap decisions can derail plans and prove costly.”

A recent Freedom of Information request by Rathbones revealed that nearly one in 10 estates liable for IHT paid over £500,000 in the most recent year for which data is available. If the trend seen over the three years to April 2022 continues, Rathbones has estimated that 3,524 estates will face IHT bills of more than £500,000 by the end of the 2025/26 tax year, based on an average annual increase of 8.74%.

“Regardless of what the future may bring, effective IHT planning starts with knowing what you can afford to give away,” Bashorun added. “That requires a robust lifetime cashflow plan to assess your capacity to part with capital or income. From there, using current allowances and reliefs makes sense. Tailored financial advice is crucial to ensure the best strategy for individual circumstances.”

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