Inheritance Tax and HNW clients: five key protection tools

Rebecca Lowe, Retail Product Lead for Protection at Aviva, outlines five essential protection tools to help advisers address growing inheritance tax (IHT) challenges for high net worth clients.

Published: 12 Jun 2026 5 mins read

The UK Inheritance Tax (IHT) landscape is shifting rapidly, and advisers working with High Net Worth (HNW) clients are feeling the impact. With the nil rate band and residence nil rate band frozen until 2031, and changes to APR/BPR reliefs which took effect from April, an increasing number of clients are being drawn into the IHT net1. Rising HMRC receipts highlight this trend, reinforcing that IHT is becoming a liability that must be funded, not simply planned around.

These pressures are already reshaping estate planning conversations. ABI New Business Market Share Exchange data shows growing demand for whole of life insurance2. This shift may indicate that more advisers are already increasingly aware of the growing value of protection solutions, helping clients secure future liquidity as part of a longer term strategy. Supporting this, research across wealth, retirement and protection highlights that advisers increasingly see the current IHT environment as structural rather than temporary, and are actively looking for scalable, repeatable solutions to support effective IHT planning3.

While pensions remain part of the wider wealth conversation, their role in IHT planning is evolving, particularly with new rules from 2027 which bring unused pensions and certain death benefits into the estate for IHT purposes. Some advisers are exploring how pension linked liability cover might develop, but the immediate priority is ensuring certainty and liquidity for clients now.

Protection has long supported IHT planning, but frozen thresholds, rising asset values and changing reliefs mean protection tools are now more important, and more sophisticated, than ever. For advisers, this is the moment to reassess the solutions available to help clients manage increasing IHT exposure.

Five tools driving modern IHT protection planning

1. Whole of Life cover – The cornerstone of funding known IHT liabilities

Whole of Life insurance remains a crucial    option for guaranteed liquidity at the point of death. It enables advisers to:

  • Provide certainty when settling known IHT liabilities
  • Align cover to predictable long term exposure
  • Demonstrate clear, structured estate planning outcomes

Joint life second death policies are a reliable mechanism for married couples/civil partners funding an estate’s IHT bill.

2. Term Assurance – A flexible, cost effective solution for temporary IHT exposure

Term Assurance offers advisers a pragmatic option for:

  • Covering short term liabilities during business or property transitions
  • Managing affordability where long term plans may change
  • Bridging gaps created by evolving legislation or uncertain future estate values

This flexibility makes Term Assurance an accessible way to meet clients where they are today.

3. Gift Inter Vivos – Supporting clients who are actively gifting to reduce their estate

As structured lifetime gifting becomes more common, Gift Inter Vivos solutions help advisers:

  • Cover the tapered 3–7-year IHT liability window
  • Reduce friction through digital, trust ready journeys
  • Protect beneficiaries from unexpected tax bills

This remains a popular tool for clients seeking to reduce their taxable estate while maintaining control and clarity.

4. Trusts – The backbone of efficient IHT planning and faster estate settlement

Trusts remain a critical part of modern estate planning. They help:

  • Keep protection proceeds outside the estate
  • Ensure beneficiaries receive funds quickly
  • Minimise the risk of additional IHT
  • Provide clients clarity about what happens at death

Improvements in digital trust processes have made trust based solutions smoother and more adviser friendly.

5. Product flexibility – essential for long term IHT planning in a changing environment

Many protection products now offer increased flexibility, allowing advisers to adjust cover levels over time to better reflect changing estate linked liabilities. Crucially, these changes can often be made without the need for new underwriting. As legislation evolves and client circumstances shift, this adaptability enables advisers to keep protection aligned to client needs, delivering ongoing value without the need to rewrite policies.

A complete approach for advisers

Frozen thresholds, shifting reliefs and rising liabilities mean protection is now a core part of estate planning, not an optional extra.

To support clients effectively in today’s IHT environment, advisers need protection tools that deliver certainty, liquidity, simplicity and long term flexibility. But tools alone are not enough. Advisers also benefit from access to insurer BDM teams who can provide deeper technical insight when cases become complex, including:

  • Underwriting guidance
  • Tax and trust expertise
  • Pre case support for large or technical scenarios
  • Help structuring protection around intricate estate arrangements

This combination of strong protection tools and specialist expertise gives advisers comprehensive support across everything from straightforward cases to highly complex HNW estate planning.

As more clients face unavoidable IHT exposure, this blend of solutions and expert guidance enables advisers to deliver confident, compliant and scalable advice, and outcomes that clients genuinely value.

Sources

1) Financial Conduct Authority (FCA), MS24/1: Market study into the distribution of pure protection products – Interim Report, January 2026. Contains public sector information licensed under the Open Government Licence v3.0.

2) ABI New Business Market Share Exchange Data Q1 2024-Q4 2025  

3) the Big Window – Aviva Adviser HNW Research Jan 2026

AUTHOR

Rebecca Lowe

Retail Product Lead, Protection 

Aviva