Investment platform Transact has unveiled an inheritance tax (IHT) index available to financial advisers.
The tracker will give advisers the possibility to monitor how much tax their clients owe to HM Revenue & Customs (HMRC) as their inherited wealth increases.
The tool was created based on research by Trajectory which discovered that by the end of 2020, more than 3.5 million households were potentially liable for IHT – an all-time high from 1.49 million in 2006.
By the same year, the total potential liability was a record £898bn ($1.1trn, €1trn).
Transact said that receiving independent financial advice is paramount to mitigate any IHT liabilities a client may have and, as such, it wanted to help advisers plan for their clients’ financial future and make the process more effective.
Jonathan Gunby, chief executive of IFAL, Transact’s parent company, 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. Advisers can plan effectively using the tools we offer as part of the Transact service which include our extensive wrapper range and trust documentation.”
Tom Johnson, Trajectory Partnership managing director, added: “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.”
