Downing: Financial advisers report interest growth in IHT planning

Investment management firm Downing has released a survey that UK financial advisers and wealth managers are reporting an increase in client enquiries about Inheritance Tax (IHT) planning ahead of the forthcoming Budget.

The data reveals that 92% of professionals in the sector have noticed the trend, with 12% reporting a substantial rise in such enquiries.

The government's IHT revenue has soared to a record £8.25bn ($11.08bn) during the last financial year.

Looking ahead, the Office for Budget Responsibility has projected that this trend is set to continue, with IHT receipts expected to reach £9.1bn in the current financial year.

Moreover, by the 29/30 tax year, these receipts could potentially escalate to £14.3bn.

The survey suggested that the growing interest in IHT planning is driven by both new and existing clients.

Approximately 38% of advisers attribute the heightened enquiry levels to new clientele, while 27% point to existing clients.

The remaining 35% indicate that the interest is evenly split between new and existing clients.

The impact of these enquiries is evident in the business operations of financial advisers, with 80% reporting an increase in the IHT-related portion of their business over the past year, including 13% who have seen a substantial rise.

The expectation is for this area of business to continue its growth, with 81% of advisers predicting that IHT planning and advice will comprise at least 20% of their business within the next three years.

Downing head of retail sales Mark Dunn said: “Growth in client enquiries about IHT planning solutions has increased materially since the last Budget introduced significant changes, and advisers and wealth managers are seeing a rapid rise in interest.

“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.”

"Downing: Financial advisers report interest growth in IHT planning" was originally created and published by The Accountant, a GlobalData owned brand.

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