Half of high-net-worth individuals plan to pass on properties to their children, leaving them exposed to both inheritance and capital gains tax.
Research by Charles Stanley found out of the 96 per cent of respondents who plan to leave an inheritance to their children, 46 per cent plan to leave their house as part of it.
The firm surveyed 1,007 HNW respondents - with either £200,000 investable assets or £200,000 household income.
Of these, 30 per cent plan to leave other significant assets to their children while 19 per cent plan to leave a business.
Liquid assets remained the preferred form of wealth transfer for HNWs with 76 per cent planning to leave inheritance in the form of money.
Parents with children aged 30-39 have already gifted them an average of £50,973, according to the research.
It also revealed property is becoming more central to wealth transfer plans with the over 50s holding 78 per cent of all the UK’s privately held housing wealth.
Harry Bell, director of financial planning at Charles Stanley, said: “While many will have financial plans in place when it comes to their inheritance and passing on assets to loved ones, it’s critical that people take stock of the nuances and traps when it comes to wealth transfer.
“A stat from our research which ought to ring alarm bells is that 40 per cent of those with children have not, or do not have financial conversations with them, opening up the chance for family disputes or other financial consequences when it comes to inheritance.
“It’s critical that home-owners seek the correct source of advice when it comes to setting up an appropriate financial plan which works for them and their families.”
The research showed that leaving an inheritance was seen as a milestone achievement by many HNWs.
Some 29 per cent of respondents said their inheritance will leave a legacy while 32 per cent said leaving one was a big part of their financial plan.
Out of those surveyed, 13 per cent said they would downsize in order to leave more of an inheritance with 15 per cent planning to leave an early inheritance to mitigate the tax bill.
alina.khan@ft.com
