During the summer, the Office of Tax Simplification (OTS) published a second report in relation to its Inheritance Tax (IHT) review, entitled ‘Simplifying the design of Inheritance Tax’. The report investigates the principal complexities and technical issues surrounding IHT and makes 11 recommendations which the OTS believes would make the tax easier to comprehend and navigate.
Simple and intuitive
In an effort to streamline gift exemptions, four of the recommendations relate to lifetime gifts, to change the way the tax works in this area to make it simpler and more intuitive for all of us. Another recommendation focuses on the interaction between IHT and Capital Gains Tax.
The accompanying recommendations consider IHT in relation to farms and businesses, addressing distortions in the operation and scope of reliefs such as those for agricultural and business property.
What next?
The report was commissioned by the Treasury, who will respond to the recommendations in due course. We’ll keep you posted on subsequent developments.
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future.
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