Inheritance Tax: Is It Time For A Change?
The Office for Tax Simplification recommends ...
POSTED BY HELEN BEAUMONT ON 30/10/2019 @ 8:00AM
The Office for Tax Simplification (OTS) has given its second report to Parliament, recommending simplification of Inheritance Tax. This is designed to make it easier for people to understand and follows a request from the Chancellor in 2018 ...
The recommended changes to Inheritance Tax may or may not make it onto the statute book!
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It is a thorough review of the administration and technical aspects of Inheritance Tax, but do remember, this is not draft legislation just yet. Because of the political turmoil in and around the House of Commons, I'm still not sure which of these recommendations will be implemented.
And I'm not even sure when they'll be considered and by what colour of Government, but hopefully, once Brexit is out of the way, things will settle down with a majority Government and we can all get back to normal.
Some things the Chancellor requested the OTS to look at were considered too difficult to tackle right now and were either bounced back to ministers or handed off to HMRC to deal with separately.
So the main recommendations are as follows:
Lifetime gift exemptions should be combined into a single personal gift allowance.
Reformation or complete replacement of the 'normal expenditure out of income' exemption.
Reducting in the period of potentially exempt transfers to five years from the existing seven.
Get rid of taper relief for gifts made more than three years before death and the 14-year rule that applies to gifts made into trusts.
Reform the rules around nil-rate band allocation for lifetime gifts.
Remove Capital Gains Tax uplift on death.
Align CGT trading activity and Business Property Relief.
Review farmhouses and Agricultural Property Relief.
Make death benefit payments paid from term life policies free of IHT without them needing to be written in trust.
Review the relevance of the pre-owned assets rules.
There really is a lot going on here, yet I wonder how many of them would make it into legislation.
Post General Election 2019, If the Government decides to move forward with these recommend changes to Inheritance Tax, the OTS have suggested they are introduced after a certain date with no further complexity in the transitional period.
Until next time ...
Would you like to know more?
If you'd like to learn more about Inheritance Tax, or would like to chat through some of the OTS recommended changes, why not call me on 01908 774323, leave a comment below or click here to ping over an email and let's see how I can help you.
About Helen Beaumont ...
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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