IHT worries ‘highlight the value of advice’

Our new research shows despite rising concern about potential inheritance tax bills homeowners are unsure about what action to take.

Our nationwide study found more than half (52%) of over-45s are concerned about landing their families with an inheritance tax bill because they have failed to take action to ease the pressure on relatives.

Research among financial advisers shows that more clients are coming to them with questions about inheritance tax – nearly two out of five (37%) of advisers cross the country have seen an increase in demand for general inheritance tax advice in the past year.

But the research shows confusion about the best ways to minimise potential IHT bills among homeowners aged 45-plus. Just 15% say they have taken specific advice on minimising their bills rising to 17% among the over-65s.

Around one in eight (12%) say they have made gifts to family members specifically to reduce any possible IHT bill with 17% of over-65s making payments to reduce their liability. Another 5% say they have set up trusts to benefit their families.

Our study among over-45s found that one in eight adults (12%) have already made gifts to family and more than half – 52% - think they have a duty to help children as their generation has been more fortunate.

Looking ahead to the future, nearly one in three (31%) adults plan to make gifts of more than £5,000 to children or grandchildren in the next five years but worry about getting it wrong, demonstrating the importance of accessing financial advice at an early stage in order to avoid costly mistakes.

Mike Morrow our Wealth & Platform Director, said:“Many people are still anxious about inheritance tax, which can often seem unfair when you are looking to pass your estate to your children and grandchildren, to ensure their ong-term financial security.

“The growth in UK house prices over the last 30 years means many more people on middle incomes could face unexpected and large tax bills if they try to pass on their home to their children or grandchildren.

“The upcoming Autumn Budget is expected to include changes to IHT rules which could look to capture even more wealth, increasing concerns among people.  It is therefore more important than ever that individuals seek support from a qualified financial adviser. However, with only one third having taken action, it is evident that the profession needs to much more to promote its benefits to people so that they know what support is available.”

“At Openwork we remain committed to promoting the value of advice as well as recruiting and training more financial advisers to ensure there is enough support available for people, especially when the inheritance tax system can often appear opaque and complex.”

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