Life offices are concerned that despite a legal victory against the Inland Revenue, new legislation could spell the end for products which take advantage of IHT loopholes.
They warn that even if the Revenue is unsuccessful in overturning a ruling in the Eversden case, legislation is expected to be introduced by the next Budget to close the loophole which allows spouses to gift assets without reservation to each other sheltered from IHT if written in trust.
Several companies offer these products, including Clerical Medical's family wealth trust and Scottish Equitable's access plus.
A consortium of life offices has funded the court case so the industry would have a firm legal footing to continue offering the products.
The Revenue lost its case recently and any appeal is unlikely to be heard before next year.
Clerical Medical is keeping IFAs updated with pro-gress on the case but believes change to the law is inevitable and that clients should be informed that the Revenue has concerns over the loophole.
Scottish Equitable technical manager Margaret Jago says: “We are carrying on offering our product and are confident that it works in the way it was designed to. We would need to see the new rules before we could say what the impact of any change would be.”