Paul Harrison

Head of Business Consultancy at Prudential

Advisers look to law firms as demand for inheritance tax advice booms

17 May 2017

  • Nearly seven out of 10 financial advisers expect demand for inheritance tax planning to grow over the next year
  • Regulatory changes mean nearly one in five advisers do not feel confident advising clients on IHT planning despite surge in demand
  • More than a third of advisers plan to work with lawyers to enhance their ability to provide IHT planning advice

Financial advisers are forecasting a boom in demand for inheritance tax (IHT) advice and looking to strengthen business partnerships with lawyers to help them cope, according to new research from Prudential1.

The study found that about seven out of 10 (69 per cent) advisers expect demand from clients for advice on IHT planning to grow over the next 12 months with 37 per cent forecasting a significant increase.                                            

But 17 per cent of advisers admit 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. About 35 per cent of advisers say they are considering strengthening links with lawyers while 22 per cent say they are already working with legal firms.

Close to 60 per cent of advisers say part of the increase in demand is being driven by new IHT rules that came into effect in April 2017. 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.

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