More than half of the under 40s now prioritise reducing their inheritance tax liabilities within their financial planning strategy, reveals deVere Group, one of the world’s largest independent financial advisory organisations.
57 per cent of those under the age of 40 who became clients of the consultancy giant over the last 12 months actively sought advice on estate planning in their initial meeting with a deVere wealth management professional.
Nigel Green, founder and chief executive of the firm that has more than 80,000 clients globally, comments: “There’s been a clear awakening and a groundswell of resentment amongst this age group about the burden of inheritance tax (IHT).
“This, it can be reasonably assumed, is due to the Chancellor’s freezing of the threshold last year until 2019 and because of the recovery of the property market. A combination of these circumstances has had the effect of dragging more people into the IHT net.
“Many of these people at this age will have young families and will also be reaching their earning peak. As such, they will be more likely to be thinking seriously about how they can safeguard their wealth to be able to leave a decent legacy. Passing on to our children all we can is, of course, something to which the vast majority of parents aspire; it’s a human instinct.”
He adds: “We have always advised our clients that estate planning should play an integral part of their long-term financial strategy, but increasingly our clients are coming to us with the clear objective of mitigating their IHT liabilities. And it’s not just the over 60s –traditionally the ones who would actively seek advice on this subject.
“Over the last 12 months it has become a major priority to our clients under 40 – indeed for many it has become as important as retirement and education planning.”
Mr Green concludes: “IHT is almost universally regarded as one of the most despised taxes as it is, essentially, a form of double taxation. Thankfully, however there are many bona fide solutions that the unpalatable burden of IHT can be significantly reduced. These include gifting allowances, establishing trusts, holding homes as ‘tenants in common’, and using investments such as EIS schemes that qualify for relief.”
The government announced last February that it was freezing the IHT threshold at the current level of £325,000 until at least 2019.