This forecast comes in the wake of Chancellor Jeremy Hunt’s decision to maintain the IHT threshold at £325,000 until April 2028, keeping in place the residential nil rate band at £175,000. At present, estates are taxed 40% on any amount surpassing these thresholds.

Catherine McManus, partner and head of tax at Wylie & Bisset, said that having decided to retain the threshold limits, it is inevitable that more estates will be exposed to IHT, highlighting the need for people to undertake an IHT exposure assessment early.

“The majority of estates don’t pay IHT, but when they do it’s 40%, and with the threshold freezing and inflation rates at current levels, many more estates will begin to fall into the IHT bracket because of rising asset values and other economic factors,” she said.

Ms McManus noted that, in theory, a married couple has £1 million of relief available, as each has the £325,000 nil rate band and then they each receive the added bonus of a £175,000 residential nil rate band, based on their main home if they leave that to their direct descendants.

“That £1m threshold, which was phased in from 2017 onwards, was designed particularly for people based in the south of England who perhaps had a home as their only valuable asset, to stop people being unnecessarily brought into the net,” she said.

“The residential nil rate band gets phased out on an estate worth more than £2m, so not everyone receives the £1m of relief.”

With IHT thresholds frozen and asset values rising, Wylie & Bisset is advising clients to consider their exposure to IHT when they are youngish to give themselves an opportunity to plan for the future.

“Death bed planning is not impossible but often has very limited scope,” warned Ms McManus.

“There’s a limit to what you can do in the last few years of your life. Your options are restricted the longer you leave it, so my advice would be to get your IHT exposure assessed early, have it reviewed regularly, and think about planning opportunities and when you might want to start implementing them.”

Planning opportunities might include direct gifts, IHT efficient investments, trusts and family limited company structures.

“Insurance policies can be specifically geared towards paying the IHT liability with the express intention of wishing to leave assets to descendants without them facing the burden of a 40% tax charge,” added Ms McManus.

“As tax advisers we do not give investment advice but we work closely with independent financial advisers to work on IHT mitigation strategies aligned with a client’s needs and risk profile. It’s all about timing – knowing your IHT exposure and timing are the key factors to consider.”