Now that the dust has settled from the Budget, its possible to see which clients are likely to be affected in the most significant ways. I  will be discussing inheritance tax (IHT) with my clients in 2025 as a result of the Chancellor’s speech.

Impact of the recent Budget on Inheritance Tax (IHT)

* Recent Budget reforms focused on addressing financial shortfalls.
* Public opinion on IHT is now divided:
+ 52% of Brits find it unfair or very unfair.
+ 22% view it as fair or very fair.
* Nil rate bands for IHT frozen until April 2030:
+ No further tax-free inheritance adjustments.

Increasing Estate Values and Tax Implications
* Rising estate values (e.g., record-high house prices in October).
* Widening assets included in estate size calculations:
+ Inherited pensions included from 2027.
+ AIM-listed shares taxed at 20%.

Inheritance and Lifetime Mortgages
* Lifetime mortgages address timing and utility issues:
+ Allows parents to assist loved ones (e.g., home deposits, school fees) during their
lifetime.
+ Offers flexibility in passing on assets.

Potential Tax Benefits of Lifetime Mortgages
* Equity release can reduce estate size:
+ May lower IHT liabilities or bring the estate below nil rate bands.
+ No guarantees but worth discussing with clients.

Advisers’ Role and Future Considerations
* Importance of incorporating later life lending into financial planning.
* Options for advisers:
+ Expand expertise in later life lending.
+ Partner with specialists to meet client needs.
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Please contact me to hear more…