In a survey of 55 financial advisers published by Time Investments the majority saw IHT planning as a key area of growth for their business, with 80 per cent expecting the number of retail investors seeking advice in this area to increase over the next three years.
The data was collected in August and predicted a rush to launch IHT products and investment services in the UK market, which Time Investments anticipates will provide an element of "flexibility" in IHT planning.
Henny Dovland, senior business development manager at Time Investments, said: "As the nation’s IHT bill climbs year on year, this is an opportunity for advisers to build deeper relationships with their clients and their families.
"More investors need guidance through the complexities of estate planning and specialist tax-efficient investment solutions which capitalise on business relief."
This comes despite the government hinting at the possible abolition of IHT earlier this month.
Speaking at a Conservative Party conference fringe event on October 1 chancellor of the exchequer Sajid Javid hinted the government was poised to either scrap or make reforms to the IHT regime later this year, as a review of the rules is already underway in order to simplify the system.
Mr Javid acknowledged the unpopularity of IHT among the public with claims that it was unfair people’s income was taxed both in life and at death.
Any such reforms to IHT could be made sooner rather than later with the chancellor confirming there would be a budget before the end of the year.
Three quarters of the advisers surveyed by Time Investments predicted growth in the use of business relief and 60 per cent a growing popularity in using Aim listed companies to qualify for business relief as a means to reduce client IHT liabilities.
Most Aim shares, if held in a portfolio for two years, are exempt from inheritance tax, with the exceptions of shares of companies that are themselves investment businesses or companies whose sole function is to invest in property and collect the rent.
The government allows shares held in qualifying companies which are not listed on any stock exchange, other than those specified on the Aim, to qualify for business relief as a means to encourage investors to support UK businesses.
Time Investment said this relief means, once owned for two years, the shares no longer count towards the taxable part of an inheritable estate and are free from IHT at point of death.
Despite its growth predictions for IHT planning the survey also identified an element of hesitation among advisers, with 73 per cent voicing concern over new products being launched by providers which lack expertise and the necessary track-records.
The unpopular tax has been the target of growing controversy in recent years, with the taxman collecting a record £5.4bn in funds from IHT receipts in 2018/19.
rachel.mortimer@ft.com
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