Shorter Reads

Should inheritance tax be simplified?

1 minute read

Published 12 July 2019

Authors

Share

Key information

The Office of Tax Simplification (OTS) has published a number of recommendations for how inheritance tax (IHT) could be amended and simplified. While these amendments do not go so far as to shake the foundations of the tax itself, nevertheless the proposals would require all practitioners to come to terms with the amendment of a number of rules that have stood firm for decades.

Some of the key proposals include:

1. Reducing the current IHT period during which lifetime gifts are brought into account on death from 7 years down to 5 years and, at the same time, abolishing tapering relief on chargeable lifetime gifts.

2. Replacing/reforming some existing lifetime IHT exemptions (such as the annual exemption, the exemption for gifts in consideration of marriage, and the exemption on normal expenditure out of income), with an overall personal gifts allowance.

3. Removing the CGT uplift on assets that pass free from IHT due to an exemption. In effect that would mean that the recipient would receive the asset at the deceased’s base cost, akin to hold over relief.

4. Making it so that death benefit payments from life insurance policies pass free from IHT without the need for the policies to be written into trust.

It will remain to be seen whether any of these proposals are considered any further by the Law Commission or the Government. The Labour Party has already published a policy document suggesting further, more radical amendments to the UK tax code in general and so one suspects that the above proposals will only survive so long as the Conservative Party remains in power.

https://www.bbc.co.uk/news/business-48881477

Related latest updates
PREV NEXT

Arrow Back to Insights

Shorter Reads

Should inheritance tax be simplified?

Published 12 July 2019

Associated sectors / services

  • Private Wealth
  • Tax & Estate Planning
  • Trusts

Authors

The Office of Tax Simplification (OTS) has published a number of recommendations for how inheritance tax (IHT) could be amended and simplified. While these amendments do not go so far as to shake the foundations of the tax itself, nevertheless the proposals would require all practitioners to come to terms with the amendment of a number of rules that have stood firm for decades.

Some of the key proposals include:

1. Reducing the current IHT period during which lifetime gifts are brought into account on death from 7 years down to 5 years and, at the same time, abolishing tapering relief on chargeable lifetime gifts.

2. Replacing/reforming some existing lifetime IHT exemptions (such as the annual exemption, the exemption for gifts in consideration of marriage, and the exemption on normal expenditure out of income), with an overall personal gifts allowance.

3. Removing the CGT uplift on assets that pass free from IHT due to an exemption. In effect that would mean that the recipient would receive the asset at the deceased’s base cost, akin to hold over relief.

4. Making it so that death benefit payments from life insurance policies pass free from IHT without the need for the policies to be written into trust.

It will remain to be seen whether any of these proposals are considered any further by the Law Commission or the Government. The Labour Party has already published a policy document suggesting further, more radical amendments to the UK tax code in general and so one suspects that the above proposals will only survive so long as the Conservative Party remains in power.

https://www.bbc.co.uk/news/business-48881477

Associated sectors / services

  • Private Wealth
  • Tax & Estate Planning
  • Trusts

Authors

Need some more information? Make an enquiry below.

    Subscribe

    Please add your details and your areas of interest below

    Specialist sectors:

    Legal services:

    Other information:

    Jurisdictions of interest to you (other than UK):



    Article contributor

    Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?

    Subscribe to our articles

    Message us on WhatsApp (calling not available)

    Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.

    I accept Close

    Close
    Scroll up

    Find out about Business

    Find out about Dispute Resolution

    Find out about Individuals & Families

    Find out about Real Estate

    We are Collyer Bristow - The law firm for those that
    value individuality, creativity and collaboration.

    Legal & Pricing info Regulatory InformationAccessibilitySitemapPricing and service information

    Listen to our latest podcast: Budget Miniseries: Impacts on Families with US Connections (Part 1)

    Listen to our latest podcast: Cracking the Code on Directors’ Service Agreements

    Read our latest article: Economist, or just economical with the truth? How can employers respond to ‘fake claims’ on a CV?

    Listen to our latest podcast: Autumn Budget 2024 Special (Part 2)

    Read our latest article: ‘Promoting the integrity of the register’: The new Companies House approach to non-compliance

    ExpandNeed some help?Toggle

    < Back to menu

    I have an issue and need your help

    Scroll to see our A-Z list of expertise

    Get in touch

    Get in touch using our form below.



      Business Close
      Private Wealth Close
      Hot Topics Close