Published: 14/11/2024 By Hannah Duncan
As financial advisors, we are aware of the evolving landscape of inheritance tax (IHT) and its implications for our clients. Recent projections indicate that by 2030, one in ten deaths will trigger an IHT charge. This significant increase underscores the urgent need for comprehensive financial planning and advice.Understanding the IHT Landscape
Inheritance tax is levied on the estate of a deceased person, and with rising property values and stagnant tax thresholds, more families are finding themselves liable. The current threshold for IHT is £325,000, with anything above this amount taxed at 40%. While there are reliefs and exemptions available, such as the residence nil-rate band, navigating these can be complex.
The Impending Surge in Demand
The anticipated rise in IHT charges is expected to drive a surge in demand for financial advice. Families will seek guidance on how to mitigate their tax liabilities and ensure that their wealth is passed on efficiently. As advisors, we are ready to address this growing need for advice with tailored strategies and proactive planning.
Recent Legislative Changes
Recent announcements in the Autumn Budget have significant implications for IHT planning. The government has decided to extend the IHT nil-rate band and the residence nil-rate band until 2030[1]. Additionally, reforms to business property relief (BPR) and agricultural property relief (APR) will come into effect from April 2026, reducing the relief available for high-value estates [1]. Furthermore, from April 2027, inherited pensions will be included in the value of an estate for IHT purposes [1] [2].
The Role of Financial Advisors
As financial advisors, our role is to provide clarity and confidence in the face of these changes. We stay informed about legislative updates in order to continuously educate our clients on the best practices for estate planning. Building strong, trust-based relationships with clients are essential as we navigate this challenging environment together.
Why give us a call
The projected increase in IHT charges by 2030 presents both a challenge and an opportunity for us as financial advisors. By proactively addressing these issues and offering strategic advice, we can help our clients safeguard their legacies and achieve peace of mind. Now more than ever, our expertise will be crucial in guiding families through the complexities of inheritance tax planning. For that reason we offer an initial meeting free of charge; please do not hesitate to get in contact to see how we can help you navigate these changes and secure your financial future
References
[1] Autumn Budget makes significant changes to inheritance tax
[2] Rachel Reeves announces 3 major changes to Inheritance Tax in Budget