Some 60% of UK investors don’t know how much money they could leave their loved ones before inheritance tax (IHT) is incurred, Octopus Investments research has found.
It also revealed that 50% don’t expect their estate to have an IHT liability meaning that many investors are not realising they may be caught by the IHT net.
The survey also showed that 55% of investors have not spoken to family or beneficiaries about IHT with 19% saying they were not sure how IHT will impact them.
Some 48% also said that they had not spoken to a financial adviser about the tax because they were either too young to think about IHT (16%) or because their adviser had not brought it up with them (29%).
Julia Greenwood, key partnerships manager at Octopus Investments, said: “Advisers do a wonderful job helping their clients build their wealth over their lifetime, and more of it can be passed on with effective planning.
“Starting the conversation by talking to clients about what problems they want their money to solve when they pass away is key. It is important to form that emotional connection by showing that effective planning means giving their grandchildren a wonderful wedding or getting on the housing ladder, or even topping up their children’s pension pots for a comfortable retirement.
“Moreover, advisers’ businesses are valued on advice fees and assets under management. By being proactive with clients and their families on estate planning, it can increase the likelihood of retaining those assets when the client passes away and acquiring new younger clients with additional planning needs.”
