The government department simplifying our present tax system is taking a fresh look at inheritance tax. Their review has just been published and we’re going to take you through it.
The review says:
The review will consider how aspects of the IHT system work, if and how they might be simplified. This will include a combination of questions such as:
- The process around submitting IHT returns and paying any tax, including cases where it is clear from the outset that there will be no tax to pay;
- The various gifts rules including the annual threshold for gifts, small gifts and normal expenditure out of income as well as their interaction with each other;
- Other administrative and practical issues around routine estate planning, compliance and disclosure. This includes relevant aspects of probate procedure, in relation to situations which commonly arise;
- Complexities arising from the reliefs and their interaction with the wider tax framework;
- The scale and impact of any distortions to taxpayers’ decisions, investments, asset prices or the timing of transactions because of the IHT rules, relevant aspects of the taxation of trusts, or interactions with other taxes such as capital gains tax; and
- The perception of the complexity of the IHT rules amongst taxpayers, practitioners and industry bodies.
What it means in layman’s terms
This could result in legislation being presented to parliament to change the present options usually considered by UK taxpayers to minimise IHT liabilities.
We are still some way from any changes being actioned. We’ll be keeping an eye on the situation and will let clients know if anything changes.
As experts in inheritance tax and wealth management, we can advise you on how to deal with things now. Call us for a chat.