Platform provider Transact has created an inheritance tax index to enable advisers to track the liability trends for their clients as the level of inherited wealth increases.
By the end of 2020, more than 3.5 million households were potentially liable for inheritance tax, taking the potential tax liability to £898 billion, according to research carried out by insight and foresight experts Trajectory.
The number of potentially liable households had also increased substantially from 1.49 million to 3.51 million between 2006 and 2020, while the percentage of liable households in London more than doubled between 2006 and 2020.
Transact said that its new resource was part of its ongoing commitment to help advisers and their clients and create awareness of this growing issue.
Jonathan Gunby, IFAL chief executive officer, said: “We are pleased to create this resource for advisers to aid their discussions with their clients and create awareness on a prominent issue. It will be of great benefit to advisers and the growing number of consumers who may be liable. Advisers can plan effectively using the tools we offer as part of the Transact service which include our extensive wrapper range and trust documentation.”
Tom Johnson, partnership managing director of Trajectory, added: “As house prices are increasing faster than the thresholds, more people are becoming liable for inheritance tax, especially in London, the South East and the East of England. For those liable, it’s never been more important to have a good knowledge of how IHT works and what the implications for them could be.
“In our recent survey of homeowners, half admitted they didn’t understand IHT and a third are planning to take professional advice to explore how they might reduce their liability.”
