Tuesday, 10 January 2023 08:46
Transact creates IHT index for advisers
Adviser platform Transact has created an inheritance tax index to enable advisers to track IHT liability trends with their clients.
The index uses data from the Wealth and Assets Survey from the Office for National Statistics.
Transact said the index can help advisers and their clients manage their portfolios more effectively when considering estate planning.
Jonathan Gunby, CEO of Transact, 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.”
By the end of 2020, over 3.5m households were potentially liable for IHT with the potential tax liability reaching a high of £898bn. This compares to just 1.49m households in 2006.
The index is based on research conducted by strategic insight consultancy Trajectory.
Tom Johnson, managing director at Trajectory Partnership, said: “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.”
IHT receipts continued to soar in 2022, with receipts for April to November £600m higher than the same period in 2021, reaching £4.8bn.
Prime Minister Rishi Sunak had previously frozen the threshold at £325,000 until April 2026 during his tenure as Chancellor.
The Office for Budget Responsibility expects IHT receipts to soar from £6.1bn in the 2021/22 tax year to £7.8bn in 2027/28 - an increase of 28%.
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