THREE CLIENT CHALLENGES EVERY ADVISER WILL FACE IN
THE INHERITANCE ECONOMY We are living in an ageing society. In the UK, it is estimated that 1.2% of the British population passes away each year. This equates to over 750,000 people per annum – and deaths are expected to rise over the next 10 years. Unfortunately, the amount of inheritance tax (IHT) being paid by families is rising. This is often as a result of beneficiaries who are not properly advised. The Financial Times reported that the value of IHT receipts to HMRC last year was a massive £5.4 billion. This number is expected to double by 2030 to more than £10 billion. This amount of inter-generational wealth transfers is unprecedented in UK history. Known as The Inheritance Economy, it has created a once in a life time opportunity for financial advisers.
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GB Investment Magazine · May 2020
But what are the main hurdles advisers need to overcome to reduce wealth cascading outside of the client’s family? CONTROL & ACCESS Firstly, there is a huge misconception that estate planning only involves setting up trusts or gifting inheritance. While these traditional solutions may work for some, they involve clients giving up control or access to their capital. There are increasingly popular alternatives emerging. These are tax-efficient and provide clients with flexibility and capital growth, without capital falling outside of their estate. One of the most effective is Business Relief (BR); a piece of government legislation offering IHT relief. Investing in assets which qualify for BR such as British forestry, hotels and residential developments, or stocks
