Hundreds of advisers' clients have failed to make any plans to combat their IHT liability, leaving them vulnerable to a 40% tax hit, research suggests.
According to a Skandia survey of 750 advisers, 80% say half their client base have not made appropriate plans.
"It's a serious concern so many clients are not putting sufficient plans in place to protect themselves from a potential IHT charge," Skandia protection marketing Ian Brown says.
Planning for IHT is likely to be a key focus for advisers, with 50% of those questioned saying at least a quarter of their clients have assets exceeding the current £325,000 nil rate band.
For clients that have sufficient IHT planning in place, the advisers in the survey reported making lifetime gifts of capital is most important for 50%, followed by use of a life assurance protection policy (35%) and making lifetime gifts out of income (15%).
One in six advisers say at least a quarter of their clients have taken out a protection policy to cover their IHT liability.
Skandia says to avoid lengthy probate delays, advisers and their clients should consider placing protection policies in trust.
"Changing market conditions and personal circumstances can shift the requirements of protection, potentially leaving some clients with unprotected IHT bills," Brown says.
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