Aipedia: Tax advisers

AI in inheritance tax and estate planning

Aipedia, by the Apex broking team · Last reviewed 2026-10-27

AI can help with inheritance tax computations and planning drafts, but advice must reflect the law at the date given, because errors often surface only after death. That makes IHT one of the longest-tail risks in tax practice.

Part of: AI in Tax advisers

In short

Inheritance tax work combines computations, records of lifetime gifts, trust structures and planning that may not be tested for many years. AI tools can draft summaries and calculations quickly, but their knowledge may predate recent Budget changes, and they cannot know a family's full gift history. The PCRT AI guidance requires members to check that output reflects current law and to stay accountable. Claims may come from personal representatives or beneficiaries long after the advice. CIOT/ATT rules require PI to continue for at least six years after ceasing practice, and some firms consider longer run-off.

How AI is used in IHT and estate work

Advisers use AI to summarise reliefs and exemptions, estimate an estate's exposure, model gifting strategies, draft explanations of trust options and produce client letters. Some feed in schedules of assets and ask for a full computation. The output looks complete. What it may lack is the current rules after the latest fiscal event, the interaction between reliefs, and facts the client has not mentioned, such as earlier gifts or interests in trust.

The duties that apply

PCRT AI guidance competence: check that content reflects current law (3.x), treat output as a junior's work (3.4) and remain accountable (3.5).
Integrity (1.x): be able to explain how the advice was reached and avoid overstating its accuracy.
Professional behaviour (5.x): avoid contrived planning; the Standards for Tax Planning apply to estate planning too.
Confidentiality (4.2): estate information is highly sensitive and often involves several family members.
Records: keep an audit trail; in IHT work it may be needed a decade or more later.

Why out-of-date rules are the main risk

Language models are trained on material up to a cut-off date and may not reflect changes announced or enacted since. IHT rules can change at any fiscal event, and commentary on proposals can be mistaken for enacted law. A tool may also mix up proposals that were later amended. The adviser must confirm the position on primary sources for the date the advice is given, and state that date in the advice.

What can go wrong

Illustrative scenario: a client asks whether a planned gift and a change to a business structure will reduce IHT. The adviser uses AI to draft the analysis, which relies on rules that have since changed. The letter does not mention the change. Years later the client dies, the planning does not achieve the expected result, and the personal representatives and beneficiaries claim the extra IHT that proper advice would have avoided. The adviser has since retired.

Beneficiary claims raise questions about who was owed a duty of care, which depend on the facts. They also arrive late: by then staff have left, files are archived, and the AI tool used may no longer exist.

How PI usually responds

PI is usually written on a claims-made basis, so the policy in force when the claim is made responds, not the one in force when the advice was given. That is why run-off matters. The CIOT/ATT PII Regulations require cover for at least six years after a member ceases practice (7.1), and claims from IHT work can arrive later than that. A negligence claim for avoidable IHT would usually be handled like any other civil liability claim, subject to the wording. See CIOT/ATT tax specialist PII, run-off cover explained and retiring and PI run-off.

Practical controls

Verify every rate, relief and threshold on primary sources for the advice date.
Date the advice and state the law it is based on.
Gather a full gift and trust history from the client in writing.
Keep AI prompts and outputs with the file for the long term.
Plan run-off before retiring or selling the practice.

How Apex helps

Apex arranges PI and run-off for tax advisers doing estate work. A broker can look at how long your IHT exposure runs and what cover you need after you stop practising.

Sources

Frequently asked

Can AI keep up with Budget changes to IHT?

Not reliably. Models are trained up to a cut-off date and may confuse proposals with enacted law. The PCRT AI guidance asks members to check that content reflects current law, so confirm the position on primary sources for the date of advice.

Can beneficiaries sue a tax adviser?

In some circumstances, depending on whether a duty of care was owed to them and the facts of the engagement. Personal representatives may also bring claims on behalf of the estate. These claims often arise years after the advice was given.

Should my IHT files record that AI was used?

Yes. The PCRT AI guidance recommends an audit trail of AI tools used, with screenshots of prompts and copies of sources. In IHT work, where claims may arise many years later, that record helps show what was checked and why the advice was reasonable at the time.

How long must I keep PI after retiring?

The CIOT/ATT PII Regulations require cover for at least six years after ceasing practice (7.1). Because IHT claims can arise later, many advisers consider whether longer run-off is worthwhile. A broker can explain the options.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.