Irwin Mitchell Private Wealth Hopes Office of Tax Simplification Will Look At Key Issues
Chancellor Philip Hammond has written to the Office of Tax Simplification (OTS) asking for a review of the Inheritance Tax (IHT) system and setting out a number of issues which he would like them to address.
Expert Opinion“It is good to see the Chancellor of the Exchequer taking an interest in simplifying inheritance tax (IHT), which is well overdue. ‘Improving the customer journey’ is a major priority at HMRC, and so as a result changes are afoot.” Anthony Nixon - Partner
Irwin Mitchell Private Wealth hopes the OTS will look at the following:
- Reform (perhaps complete abolition) of the ridiculously complex new IHT allowance linked to the value of one’s home, known as the Residence Nil Rate Band (RNRB). Put plainly, it discriminates against those who do not own their own home, those who do not have children, and those who not married. The current £325,000 allowance, which has been fixed since 2010, could then be raised for everyone.
- A fresh look at the IHT rules for trusts, where the opportunity for reform was missed by HMRC in a recent review. It should be easier for those worried about their own improvidence to be able to create a trust for their own benefit, without tax penalties.
- Simplification of the IHT reliefs for businesses and, particularly, farmers, whose families usually have to claim both agricultural and business reliefs, rather than making a single claim.
Anthony concluded: “It’s imperative that with change, the people who will be affected by these changes are considered at every turn. Simplification mustn’t come at the expense of fairness and justice to the families and beneficiaries who should receive inheritances.”