New research from Prudential has revealed that financial advisers are forecasting a sharp rise in demand for inheritance tax (IHT) advice.
The study found that around seven out of ten (69%) advisers expect demand from clients for advice on IHT planning to grow over the next 12 months, with 37% forecasting a significant increase.
However, 17% of advisers apparently feel that, due to regulatory changes, they are not sufficiently confident in advising on IHT issues and want to develop links with legal firms and other specialists.
Close to 60% of advisers say part of the increase in demand is being driven by new IHT rules that came into effect in April this year. The rules are complex, but comprise an additional £100,000 per person residence nil-rate band. This limit will increase each year and complements the standard nil rate band to provide a potential £1 million IHT allowance for a couple in 2020/21.
Increased access to pension savings as a result of Pension Freedoms and the ability to leave pension wealth to family as well as rising property prices are also major factors.
“Rising property and pension wealth are making it increasingly important for advisers to be able to help clients with specialist advice on IHT planning and demand for advice is booming,” commented Paul Harrison, Head of Business Consultancy at Prudential.
“One specialist area that is driving demand for IHT advice is enquiries about using trusts – more than half (52%) of advisers say they have seen a rise in enquiries about trusts for IHT planning,” he added.
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