Earlier this year, the Chancellor of the Exchequer and the Financial Secretary to the Treasury requested that the The Office for Tax Simplification (OTS) review key aspects of the inheritance tax (IHT) legislation and identify inheritance tax simplification opportunities within the administrative processes with which taxpayers interact with HMRC.
Inheritance Tax Simplification
According to information posted to the government’s website recently, the inheritance tax simplification review would appear to be wide ranging and issues to be examined include:
- 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 and the wider IHT framework;
- Other administrative and practical issues around routine estate planning, compliance and disclosure, including 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.
If you have an opinion on this subject then be aware that The OTS is seeking views from those who have concerns about or personal experience of Inheritance Tax and have prepared an on-line survey which you can take part in (see link below). The survey closes on the 8th of June and will form part of the inheritance tax simplification report.
Paul Morton, OTS Tax Director, said:
This call for evidence and survey will help inform our research into Inheritance Tax and the recommendations we make in our final report. We know that there is a great deal to consider and we want to explore this with the help of individual taxpayers, as well as professional advisers and representative groups.
In a nutshell, while tax rates are for government, the role of the OTS is to challenge tax complexity and so help all users of the tax system, and so we hope to hear from as many individuals as possible. We are keen to hear both from those who have had some experience of dealing with Inheritance Tax and those who are concerned about it, but who may be unfamiliar with it.
If you wish to take part in the review or find out more about the review please access the OTS website which can be found at: https://www.gov.uk/government/organisations/office-of-tax-simplification
Bourne Accountancy are specialist IHT advisors and so will be keeping a keen eye on the outcome of these deliberations as they could turn even the most basic IHT planning on its head. We will keep readers informed when the OTS publishes its report although it may be some time before any changes are enacted and have a direct impact on estate planning. The OTS doesn’t envisage publishing its initial report until the Autumn of this year.
About The Office for Tax Simplification
The OTS is the independent adviser to government on tax simplification, challenging tax complexity to help all users of the tax system; it does not implement changes – these are a matter for government and for Parliament.
The OTS team is led by Chairman Angela Knight CBE and Tax Director Paul Morton and has a small staff drawn from HM Treasury, HM Revenue and Customs and the private sector.
The OTS works to improve the experience of all who interact with the tax system. It aims to reduce the administrative burden – which is what people encounter in practice – as well as simplifying the rules. Simplification of the technical and administrative aspects of tax are each important, both to taxpayers and HMRC.
Inheritance Tax Simplification Review by the Office of Tax Simplification
To find out more about Bourne Accountancy please visit our main website: http://www.bourneaccountancy.co.uk or call us directly on 01293 399520.
To read more on the subject of Inheritance Tax please visit: http://inheritance-tax.bourneaccountancy.co.uk