‘Advisers will need to help IHT clients with ostrich approach’

The business line manager for inheritance tax at fund house Octopus said advisers would increasingly need to help clients with an “ostrich approach” to their potential tax liabilities as the amount of IHT collected by HM Revenue & Customs continues to “creep up”.

Statistics released by HMRC showed that £3.1bn was collected in death duties in 2012/2013.

Mr Williams said: “As people’s wealth increases and the population ages, the impact of IHT will continue to grow and yet the current nil-rate band of £325,000 is frozen until 2018 at the very earliest.

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“This means that an increasing number of people will be drawn into the IHT net as they see the value of their estate creep over the IHT threshold.”

He said many people could be reluctant to confront the issue because certain IHT mitigation strategies, such as gifts and trusts, may require them to “relinquish control” of their assets. However,he pointed out that a number of more “flexible” alternatives were available.

Adviser comment

David Smith, wealth management director for London-based Bestinvest, said: “IHT solutions is arguably the fastest growing market out there. One cannot underestimate the detrimental impact that a frozen nil-rate band has had.

“People now need shorter-term IHT relief solutions as they suddenly find themselves in a dangerous position and products that were once quite bespoke, such as business property relief schemes, are now becoming mainstream.”