From April 2027 unused pensions will also fall into the scope of IHT, which is likely to lead to a surge in IHT receipts for the Treasury.
More than nine in 10 Financial Planners (94%) have reported a rise in demand for IHT planning advice since the October Budget, according to a new report.
A third (32%) of 100 advisers surveyed by investment manager Downing say they had seen a substantial increase in enquiries.
Two in five (43%) of the advisers and wealth managers questioned said enquiries were mainly coming from new clients, with 17% seeing enquiries mainly from existing clients and 39% reporting a mix.
Adviser also expected the number of IHT-related enquiries to continue to rise, with 91% expecting an increase over the next 12 months and 46% forecasting a substantial increase.
Two thirds (61%) said that a fifth or more of their business comprises IHT planning and advice. Within the next three years 85% of advisers said they expected a fifth or more of their business to be driven by IHT advice.
From April 2027 unused pensions will fall into the scope of IHT, which is likely to lead to a surge in IHT receipts for the Treasury. The Office for Budget Responsibility has forecast that close to 10% of all estates will pay IHT by 2030.
Inheritance tax raised £7.6bn for the Treasury in the 2023/24 tax year, an increase from £7.1bn in the previous tax year. Receipts are forecast to continue to rise as fiscal drag pulls more estates into the IHT net with the nil-rate band and residence nil-rate band frozen until 2030.
Restrictions on Agricultural Property Relief and Business Relief from April 2026, as announced in the October Budget, will also see family-owned farms and businesses pulled into the IHT net.
The research from Downing found that concerns about the cost of IHT advice was the main reason deterring clients from seeking help. Two thirds (68%) of advisers identified costs as the main barrier, while 60% pointed to a belief that advice will be complex.
Nearly half (46%) of the advisers surveyed said clients were over the age of 50 on average when they first enquired about IHT.
In terms of what tools advisers were utilising to mitigate IHT for clients, 64% were using trusts, 63% were gifting from income, 34% were gifting lump sums, and 12% were using business relief plans.
• PureProfile surveyed 100 UK financial advisers and wealth managers on behalf of Downing in November.
