Advisers have predicted an increase in demand for Business Relief solutions in light of changes in Inheritance Tax (IHT) rules, according to research from Downing.
Research found that 81% of advisers expect more clients will use Business Relief for IHT planning, with 10% anticipating a substantial rise.
This expectation follows last year’s Budget speculation about the potential elimination of Business Relief, which led some clients to abandon existing plans.
The study revealed that 14% of advisers saw a significant number of clients pull out of schemes, while another 73% reported some clients withdrawing.
The October Budget revised Business Relief, reducing the 100% relief available from 2026 and requiring a 20% IHT on the first £1m of qualifying business and agricultural assets, along with the current nil rate band of up to £500,000 per individual.
Downing’s research showed that 59% of advisers estimated up to 20% of their clients used Business Relief schemes for IHT planning, and another 33% estimated usage between 20% and 30%.
Most advisers diversified their choice of providers for Business Relief solutions, with 64% using two providers and 13% using three or more.
Mark Dunn, head of retail sales at Downing, said: “The Budget decisively ended the uncertainty over Business Relief enabling advisers and providers to plan for the future.
“Business Relief plays an important role in helping growing businesses to access funding while also enabling people to plan for any IHT liabilities they may have.
“Speculation before the Budget that Business Relief could be scrapped entirely had a major impact as demonstrated by the research showing that advisers saw some clients pulling out of schemes, they had invested in.”
