Survey shows impact of inheritance tax threshold freeze


New research has uncovered that approximately one out every three financial advice clients will feel the effects of frozen inheritance tax (IHT) thresholds.

The recent survey, conducted by investment firm Octopus, quizzed over 200 financial advisors based in the UK, with respondents revealing that around 31% of clients would be negatively impacted by the threshold freeze outlined in Chancellor Rishi Sunak’s spring budget.

Most advisors surveyed confirmed that clients were aware of the freeze on IHT but only 11% felt customers had a comprehensive understanding of the impact of this change on their financial affairs. Approximately 32% of the respondents stated that clients likely to be adversely affected by the IHT threshold freeze are entirely unaware of the issue.

To mitigate the present circumstances, the vast majority of advisors surveyed came to the conclusion that a client’s best option would be to avoid the 40% tax by increasing their lifetime gifting. However, 37% of those surveyed expected to see an increased use of investments eligible for business property relief, while 36% anticipated clients would employ lifetime trusts.

Not surprisingly, people in the UK are seeking ways to lessen the IHT bill they leave behind and expert financial advice in Shropshire, Chester and other UK areas can depend on professional wealth management services for guidance. Unlike financial advisors, wealth managers will take a more holistic view to their clients’ finances, incorporating all aspects from retirement planning and investments, to long-term strategies for mitigating tax.

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