Recent changes to the inheritance tax regime have sparked a significant rise in demand for professional advisers.
- The Office for Budget Responsibility projects a sharp increase in the percentage of deaths subject to IHT from 5.1% in 2022/23 to 9.5% by 2029/30.
- Utmost Wealth Solutions highlights a potential growth from 35,000 to over 66,600 deaths impacted by IHT during this period.
- The Chancellor confirmed an extension of the freeze on the nil rate band and residence nil rate band until 2029/30.
- These financial policy adjustments are prompting advisers to assist clients in effectively managing their estates.
The recent amendments to the inheritance tax (IHT) structure are causing a notable uptick in the need for expert advisory services. The projected increase in the proportion of deaths subjected to IHT, climbing from 5.1% to 9.5% by the fiscal year 2029/30, signifies a substantial shift in financial planning dynamics. This surge is anticipated to lead to more than 66,600 deaths falling under the IHT charge, nearly doubling the current statistics, according to Utmost Wealth Solutions.
As reported, the extension of the nil rate band and residence nil rate band freeze until 2029/30 by the chancellor stands as a critical factor influencing this trend. This policy decision essentially extends existing limits on untaxed inheritance, impacting a broader spectrum of estates over the coming years. Such measures necessitate a proactive approach to estate management, urging advisers to provide strategic guidance.
Given the anticipated policy impact, advisers are expected to play a pivotal role in helping clients navigate these complex estate planning issues. Financial professionals are increasingly tasked with structuring estates to minimise IHT liabilities, thus ensuring optimal asset protection and transfer to heirs. Rachel Reeves’ advocacy for adjustments to business-related regulations further underscores the evolving landscape requiring professional insight.
These developments highlight the growing necessity for adept financial advice to manage estates effectively amidst changing IHT regulations.
