Advisers recommending business relief to mitigate IHT

Business relief (BR) is rising in popularity as a way for advisers to mitigate inheritance tax (IHT) for their clients, according to new research.

A study from TIME Investments revealed that 17% of advisers are now recommending BR as the preferred IHT solution for clients at least once a month. A further 32% are recommending it every three months, meaning that almost half of advisers are recommending BR at least once a quarter.

The findings come as IHT receipts continue to rise, hitting £5.4bn for the 2020/21 tax year. TIME Investments suggested that BR offers investors a faster route to IHT relief, requiring only two years to gain IHT exemption instead of seven years with gifting or trusts.

The new research, based on a study among 1,019 individuals, also showed that 29% of retail investors aged between 55 and 64 said that the pandemic has made them think more about their mortality and seek estate planning advice to make sure they have plans in place when they die.

In response, TIME Investments has reported that its IHT solution, TIME:Advance, has seen a 33% increase in inflows year-to-date, compared to the same period in the 2019/20 tax year, prior to the pandemic. This has resulted in TIME:Advance hitting an assets under management (AUM) milestone of £750m in October, several months earlier than expected.

TIME Investments managing director, Nigel Ashfield, commented: “TIME:Advance has been recognised as a market-leading IHT planning solution as demonstrated by the AUM milestone and the frequency with which advisers are using BR for their clients’ estate planning. The pandemic has also focused advisers and their clients on ensuring appropriate plans are in place.”

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