Over a quarter of high-net-worth individuals (HNWIs) do not have measures in place to address inheritance tax (IHT) or increase the tax-free assets that they hope to pass on, new research from Saltus has indicated.

In the latest Wealth Index Report published by wealth management firm Saltus, 28% of respondents said they had no measures in place to address IHT.

The study was based on a survey of more than 2,000 people in the UK with investable assets of £250,000 or more, and found that of these respondents, 8% do not have any plans in place, although they do plan to at some point. Another 4% had not thought about it while 2% do not plan on taking any measures at all to mitigate the impact of IHT.

The current IHT thresholds are due to be in place until 2028 and with inflation persisting, and house prices increasing, more people are continuing to cross the threshold and will be liable to pay the tax.

In 2021/2022, HMRC received £6.1bn in IHT payments – a £729m (14%) increase on the previous 12 months.

Despite the rise in the number of estates liable to pay IHT, and the increase in the amount of the tax being paid, the Saltus data has indicated that many of the UK’s wealthiest people are failing to make plans to pass on their wealth and protect their estates from IHT at a time when an increasing number of people need to consider the potential implications of this tax.

Partner at Saltus, Mike Stimpson, commented: “It is surprising that a quarter of HNWIs do not have IHT plans in place, as we know that people want to leave as much of their wealth to their loved ones as possible and proper planning can ensure this happens.

“The years where IHT applied only to the UK’s wealthiest are long behind us. Over the last 20 years, we have experienced a boom in UK property, which means many more of us will be impacted by IHT and need to consider which measures to put in place.

“It has been widely reported that the Government held talks about scrapping IHT. Given that Saltus’ latest research shows that over a third (36%) of HNWIs feel that they already pay too much tax, the removal of IHT, if it were to happen, would likely be welcome news to them as well as to the increasing number of people pulled into being subject to this tax.

“As things stand, IHT can be a significant burden on estates, but there are a variety of tools and strategies available to minimise its impact. By taking the time to consider this as part of a financial planning strategy, people can ensure that their beneficiaries receive the most from their legacy, rather than the Government.”

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