The proportion of deaths subject to inheritance tax (IHT) is expected to double from 5.1% in 2022/23 to 9.5% by 2029/30, prompting a surge in demand for financial advisers, according to Utmost Wealth Solutions.
This change will result in more than 30,000 additional deaths being liable for IHT each year, pushing the total from 35,000 to 66,600.
The report indicated that frozen thresholds and changes to non-dom rules will create significant opportunities for advisers to help clients with wealth transfer.
The Office for Budget Responsibility (OBR) released forecasts highlighting the impact of changes to the IHT system.
The Budget indicated that the freeze on the Nil Rate Band and Residence Nil Rate Band would extend until 2029/30.Â
Chancellor Rachel Reeves introduced major changes to Business Relief and Agricultural Property Relief, alongside potential adjustments to pension death benefits.
Reforms for Resident Non-Doms (RNDs) will remove the connection between domicile and IHT, meaning RNDs in the UK for over four years will pay UK tax on their worldwide income and gains.
They will remain liable for IHT on leaving the UK if they were UK residents for 10 of the last 20 years.
Marc Acheson, global wealth specialist at Utmost Wealth Solutions, said: “Inheritance tax is often badged as one of the UK’s most unpopular taxes but can be perceived as ‘voluntary’ in that there are steps that can be taken to reduce its impact.
“The reforms announced by the Chancellor will create a growing opportunity for advisers as more and more individuals seek help in navigating the new rules with the OBR estimating that, by the end of the decade, twice as many people will be impacted by IHT every year.
“In the short-term, we expect to see a surge in demand from individuals looking to re-engage advisers and reconsider their plans.
“The clampdown on the number of assets exempt from IHT will see strategies shift to lifetime gifting earlier and more often to individuals or trusts as well as spending pension pots.”
