Advisers can play key role in educating on IHT

Advisers can play key role in educating on IHT

The affluent are failing to use basic inheritance tax planning to their advantage, so advisers should play a pivotal role in helping these clients, Sean Christian has said.

The managing director of Canada Life International said: “Advisers have a vital role to play in educating them about the straightforward estate planning tools that can make a big difference to the amount of wealth an individual can leave to his family.”

Research by Canada Life, which surveyed 1,007 over-45s with over £350,000 in assets, revealed that only 12 per cent had set up trusts for their families, while 70 per cent had no intention of setting one up.

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“Many choose to leave estate planning until later in life, but the fact that the proportion of people setting up a trust barely changes with age is worrying that not enough are aware of this option for shielding their wealth,” Mr Christian added.

“A lot of people also said that setting up a trust is complicated. The reality is that with the right advice it can be very simple.”

Less than half of respondents – 44 per cent – had life insurance, while 76 per cent had no intention of taking out a policy.

The research also revealed that while only 27 per cent had not written a will, 70 per cent had no intention to, which meant their wealth could pass to those not intended under the intestacy rules.

Worryingly, the findings demonstrated that only 8 per cent were prepared to consider seeking advice on inheritance tax planning, according to the survey.

With 17 per cent intimating that setting up a trust was too complicated, it highlighted the importance for advisers to engage.

“Advisers are well-placed to navigate the complexities to make it a simple process for their clients,” Mr Christian added.

Failure to plan adequately could also leave families with the burden of paying large tax bills which could have been reduced by seeking advice.

Which of the following have you used as part of IHT planning?


Written a will

Taken out life insurance

Set up a trust

Aged 45-54




Aged 55-60




Aged 61-65





Adviser View

Ian Hawkes, chartered financial planner for London-based Brooks Macdonald Financial Consulting, said: “I think it would be almost impossible to be a good IFA without addressing multi-generational financial planning, for example things such as inheritance tax mitigation.”

In a statement on its website, specialist advisory firm Family Assets Protection, which has its head office in Staffordshire, said: “The vast majority of people put off making a will for a variety of reasons, either believing that the people they would wish to inherit will automatically do so, or because they don’t think it is relevant to them at this particular time.

“The reality is that you can put off making a will until it is too late and this poses all sorts of problems for the people left behind and could mean that some or all of your inheritance either goes to the wrong person or to the crown.”