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Navigating AI compliance for IHT 2027

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By Dimitri Limata, COO at MoiraCorp. As we approach the 2027 changes in Inheritance Tax (IHT), AI compliance becomes crucial for financial advisers.

The April 2027 changes to Inheritance Tax (IHT) are on the horizon, and with them, a significant shift in how financial advisers must operate. AI is already transforming the landscape, drastically reducing the time needed for suitability reports. But what does this mean for compliance?

The numbers

In 2027, we expect 213,000 estates to be impacted by the IHT changes, with approximately 10,500 of these liable for IHT payments. This is no small figure, and the need for efficiency in processing these estates is paramount. AI has already proven its worth by slashing the time required for suitability reports from four to six hours down to just twenty minutes. This kind of efficiency is not just beneficial—it’s necessary.

The frameworks that apply

Despite the rapid adoption of AI, the Financial Conduct Authority (FCA) has confirmed that there are no AI-specific rules to navigate. Instead, firms must operate within existing frameworks like Consumer Duty, the Senior Managers & Certification Regime (SM&CR), and GDPR Article 32. These regulations ensure that consumer interests are protected, and that data security remains a top priority.

The role of AI in compliance

AI’s role in compliance is becoming increasingly clear. By automating routine tasks, AI allows advisers to focus on more complex issues that require human judgment. However, it’s crucial that firms do not become complacent. While AI can handle data processing efficiently, the responsibility for compliance ultimately rests with the human operators.

What this means for financial advisers

For financial advisers, the integration of AI into their operations means adapting to new workflows and ensuring that they remain compliant with existing regulations. This is not just about adopting new technology—it’s about understanding how to leverage it effectively while maintaining the standards set by regulatory bodies like the FCA and ICO. With the EU AI Act also on the horizon, staying informed and adaptable is more important than ever.

As we move closer to 2027, the landscape will continue to evolve. The key for advisers is to remain agile, ensuring that they can meet the demands of both the market and the regulatory environment. AI is a tool, not a panacea, and its successful implementation will depend on the ability of firms to integrate it into their existing compliance frameworks.

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