INHERITANCE TAX UPDATE
The Office of Tax Simplification (OTS) has published a second report in relation to its Inheritance Tax (IHT) review. The report, published in July, spans 103 pages and is entitled ‘Simplifying the design of Inheritance Tax’.
The report explores the main complexities and technical issues associated with IHT, making 11 recommendations which the OTS believes would make the tax easier to understand. Four of these relate specifically to lifetime gifts and aim to streamline gift exemptions and change the way the tax works in this area to make it simpler and more intuitive.
Other recommendations consider IHT in relation to businesses and farms, addressing distortions in the operation and scope of reliefs such as those for business property and agricultural property. A further recommendation focuses on the interaction between IHT and Capital Gains Tax.
An unpopular tax
The OTS has acknowledged that IHT remains unpopular and raises strong emotions amongst the public. The Treasury, who commissioned the report, said it will respond to the recommendations in due course. We’ll keep you updated on any further developments.
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