Inheritance Tax

Hundreds of clients vulnerable to 40% IHT hit

Hundreds of clients have failed to make any plans to combat their Inheritance Tax liability, leaving them vulnerable to a 40% tax hit, research suggests.

According to a recent Skandia survey of 750 advisers*, 80% say half their client base have not made appropriate plans.

"It's a serious concern so many clients are not putting sufficient plans in place to protect themselves from a potential IHT charge," Skandia protection marketing Ian Brown says.

Planning for IHT is likely to be a key focus for advisers, with 50% of those questioned saying at least a quarter of their clients have assets exceeding the current £325,000 nil rate band.

For clients that have sufficient IHT planning in place, the advisers in the survey reported making lifetime gifts of capital is most important, followed by use of a life assurance protection policy and making lifetime gifts out of income.

“The changing requirements of clients, based on market conditions and personal circumstances has left some clients with an unprotected IHT liability” Chartwell Private Client Director David Buchan says.

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* Source-(ifaonline 01/03/2010)