Following the Labour Party’s recent electoral success, a significant portion of financial advisers are urging for revisions in inheritance tax regulations. More than a third of advisers are prioritising these changes to align better with client needs.
- The call for modification is primarily driven by the desire for consistency and simplification of the tax system.
- Concerns are not limited to inheritance tax; changes in pension tax relief and death benefit treatments are equally advocative subjects.
- Anticipation is high among advisers for an evolution in product offerings, especially for clients in the accumulation stage of life.
- Fidelity International’s recent survey reveals significant insights into current adviser sentiment and expected policy reforms.
A recent report from Fidelity International indicates that following the Labour Party’s victory in the general election, there is a substantial demand among financial advisers for reforms in the inheritance tax (IHT) regime. Specifically, 34% of advisers and planners are advocating for these changes, citing the need for a more streamlined and consistent tax system as a primary driver for their demands.
This position is not an isolated one. Advisers are also seeking amendments in pension tax relief protocols, with 33% of respondents pointing out inefficiencies in the current system. Additionally, 30% are eager to see reforms in the tax treatment of pension death benefits. These sentiments reflect a broader desire for tax system simplification, which has been a recurring theme in industry discussions.
The findings, derived from Fidelity’s IFA DNA 2024 report, underscore the anticipation among advisers for changes in their clients’ investment strategies. A majority, 57%, expect a shift in the product mix for typical clients post-election. This change is anticipated to be most significant for those clients who are in the accumulation phase of their financial planning.
Moreover, in the specific context of the digital survey conducted by Fidelity, it was highlighted that changes in financial products will prominently affect clients who are actively accumulating assets. This expectation aligns with the advisory community’s call for a tax system that supports rather than complicates financial planning and client asset growth.
On a qualitative level, interviews with practitioners reveal a cohesive narrative: the industry’s push for a more comprehensible tax framework is driven by practical experiences and the evident complexities currently facing the implementation of tax-related strategies.
The push for inheritance tax reforms signifies a larger industry-wide advocacy for simplification and efficiency in tax regulations.
