In a bid to simplify current UK Inheritance Tax (IHT) law, Chancellor Philip Hammond has written to the Office of Tax Simplification requesting its review.
In his letter, the Chancellor described both the IHT levy and the regime as “particularly complex”. He also asked the office to consider whether the current system is fit for purpose, requesting a review to establish whether any aspects could be made simpler.
What will the review involve?
The Chancellor instructed the review to look at technical elements of the process, including when the tax is due and submitting returns, as well as issues around routine estate planning and making IHT-free gifts. It is hoped that the assessment will lead to changes that make the experience of those who interact with it “as smooth as possible.”
Commenting on the review was Sarah Cole, a personal finance analyst from Hargreaves Lansdown. She said: “Hammond suggests the Office of Tax Simplification looks at whether the current inheritance tax framework distorts decision-making.
“Well we can save them the time, because of course it does. The tax framework distorts people’s behaviour and financial decisions, and inheritance tax is no exception.”
What does this mean for you?
Of course, when it comes to estate planning, working out how to minimise inheritance tax can be hugely complicated. As such, we welcome any evaluation which aims to make things more straightforward for our clients. However, there are worries that any overhaul could be used as an excuse by the government to grab more tax.
We will know more about the precise scope and scale of the investigations over the coming weeks. In the meantime, to make sure your Will is structured to minimise the amount of inheritance tax due, you can speak to one of our expert team.
Contact us today by calling 0800 019 4557 or email firstname.lastname@example.org.