Advisers are predicting growing demand for Business Relief options from clients planning for inheritance tax (IHT).
Research carried out on behalf of asset manager Downing found 81% of a pool of advisers and wealth managers expect the proportion of clients using Business Relief for IHT planning to rise, including 10% predicting a ‘substantial’ rise.
These responses appear prompted by speculation that arose before Rachel Reeves’ (pictured) October Budget that Business Relief could be scrapped.
The researchers found that 14% of advisers had seen substantial number of clients pull out of schemes and a further 73% had seen some clients abandoning Business Relief schemes they were invested in. Just 12% said speculation had no impact on clients.
The Budget cut the 100% Business Relief currently available, so that from 2026 20% IHT is paid on the first £1m of qualifying business and agricultural assets, plus the current nil rate band of up to £500,000 per individual.
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Downing’s research also found 59% of advisers estimate that up to 20% of their clients planning for IHT use Business Relief schemes, with a further third (33%) estimating that between 20% and 30% of their IHT planning clients use Business Relief.
The research shows most advisers split the number of providers they use when advising on Business Relief solutions. Just 20% use only one provider while 64% use two and 13% split across three or more.
Mark Dunn, head of retail sales at Downing, said: “The Budget decisively ended the uncertainty over Business Relief enabling advisers and providers to plan for the future.
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“Business Relief plays an important role in helping growing businesses to access funding while also enabling people to plan for any IHT liabilities they may have.
“Speculation before the Budget that Business Relief could be scrapped entirely had a major impact as demonstrated by the research showing that advisers saw some clients pulling out of schemes, they had invested in.”
