High earners turn to estate planning to mitigate tax burden

The 50 per cent tax rate has caused a surge in interest from Britain's highest earners in trust and estate planning, and how they can pass their wealth on down through the generations of their families.

Wealth managers across the UK have reported the rise in interest over the last year from many of the people who have had to start paying the highest rate of tax since its introduction last year.

Financial planning expert, David Austin, said that there had been a particular rise in the number of clients coming to him looking to examine and shape their inheritance tax liabilities. He said it was a reflection of increased rates across many of the applicable taxes.

"I think this is related to the fact that general tax rates have increased substantially," he said. "Therefore, the total tax payable by these taxpayers has risen significantly. Having to then pay 40 per cent of everything that is left [as IHT] is highly undesirable."

Barclays financial planning authority, Phil Smith, added, "When you combine levels of personal taxation with what happens after death, people start to take notice of the levels and are keen to see what they can do to address that."