The Intermediary – November 2025 - Flipbook - Page 97
L AT E R L I F E L E N D I N G
Opinion
Mitigating IHT
means going
beyond gifting
I
nheritance Tax (IHT) receipts
continue to climb. The latest
figures from HMRC show that
the Treasury collected £3.7bn
between April and August, up
by £190m (5%) on the same
period last year. As a result, we look to
be on course for a fourth straight year
of record-breaking receipts, following
the £8.2bn raised in 2024/25.
It’s no surprise families are
increasingly looking for ways to
limit their eventual liability. Recent
research from Hargreaves Lansdown
found that almost a quarter of people
plan to give money away to manage
their IHT exposure, while 18% said
they would simply spend more to
reduce the size of their estate.
Various studies show people are
ready to act. They understand the
challenge and want to take steps now
to protect their legacy. Making use
of giing allowances is a logical first
move, but let’s be honest, giing
relatively small amounts each year
will only go so far.
For these clients, lifetime mortgages
could provide a more substantial and
strategic solution.
Gifting only goes so far
Annual giing allowances and regular
gis from income offer a simple
starting point, but the sums involved
are modest compared to the size of
many estates. Even with careful
planning, giing alone is unlikely
to make a material difference to the
eventual tax bill for clients whose
homes have appreciated significantly
in value.
If clients are serious about reducing
their IHT liability, particularly where
property wealth is concerned, they
need a broader approach. That’s
where lifetime mortgages can play a
central role.
Lifetime mortgages enable
homeowners to release a portion of
the equity in their property while
continuing to live there. The funds
can then be used to support family
members, provide financial assistance
when it’s most needed, or simply pass
on wealth during their lifetime.
By doing so, homeowners can not
only see the impact of their generosity
but also reduce the overall size of
their taxable estate. For wealthier
clients, this can help maintain access
to valuable allowances such as the
Residential Nil Rate Band, which
begins to taper once the value of an
estate exceeds £2m.
Even where clients don’t
immediately need the capital
themselves, using property wealth to
make larger, well-planned gis, or
set up trusts, can have a significant
long-term effect. What’s more, it can
be achieved without the upheaval and
emotional strain of moving home.
Specialist advice
While advisers can and should
highlight the potential benefits
of using property wealth in IHT
planning, clients must also receive
independent tax advice before acting.
The rules around giing, trusts
and estate valuation are complex and
subject to change, especially with the
planned inclusion of pensions in IHT
calculations from April 2027.
This creates an opportunity for
closer collaboration between advisers
and tax specialists. Working together
ensures clients receive comprehensive,
joined-up advice, helping them make
decisions that are both tax-efficient
and appropriate to their longterm goals.
For advisers, these partnerships
are also commercially valuable,
strengthening their proposition and
DAVE HARRIS
is CEO at more2life
Even with careful
planning, gifting alone
is unlikely to make a
material difference to the
eventual tax bill”
positioning them as trusted experts in
an area of rising client concern.
The crystal ball
Last year’s Budget introduced
significant changes that will shape
IHT planning for years to come, and
with another Budget this month,
speculation is already mounting about
whether the Chancellor will return
to the issue in an effort to boost public
finances further.
Whatever happens, advisers can
expect IHT to remain a growing
priority for clients. They will be
looking for practical, compliant
ways to reduce their exposure, and
property wealth will be central to
that discussion.
Lifetime mortgages can provide a
powerful, flexible way to help clients
achieve this. They allow homeowners
to act now, take control of their legacy,
and support the next generation,
all while managing the potential
impact of IHT.
Now is the time for advisers to
raise the subject and ensure clients
understand the full range of options
available to them. While IHT remains
one of the most unpopular taxes, with
careful planning, it doesn’t have to be
an inevitable one. ●
November 2025 | The Intermediary
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