Advisers are predicting growing demand for Business Relief solutions from clients planning for Inheritance Tax (IHT) after pre-Budget speculation last year persuaded some to ditch their existing plans, new research from investment manager Downing shows.
Its study with advisers and wealth managers found 81% expect the proportion of clients using Business Relief for IHT planning to rise, including 10% predicting a substantial rise in the numbers using Business Relief.
The predictions of growth come after speculation before October’s Budget that Business Relief could be scrapped completely. The research 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.
October’s Budget changed the 100% Business Relief currently available from 2026 so that 20% IHT is paid on the first £1 million of qualifying business and agricultural assets, plus the current nil rate band worth up to £500,000 per individual.
Downing’s research 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.
“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.”
