Government Consultation To Run Until January
Yesterday (7 November) the government announced a new consultation concerning the taxation of trusts which will affect inheritance tax, capital gains tax and income tax laws in the UK.
The consultation will run until the 30th January 2019, where a number of experts will submit their ideas on how to improve the existing system.
The consultation follows Chancellor of the Exchequer Phillip Hammond’s comments in January this year that the Office for Tax Simplification (OTS) asking for a review of the inheritance tax system and setting out a number of issues which he wanted them to address.
The OTS ran a consultation on the simplification of inheritance tax from April to June, which the tax world awaits the summary of feedback received.
“We welcome HMRC’s willingness to review the taxation of trusts and very much hope that it will result in some real simplification. Sadly, this did not happen:
- when income tax and capital gains tax on trusts were last consulted on in the first part of the 2000s;
- when HMRC, without consultation, made fundamental changes to the inheritance tax rules on trusts in 2006; or
- in the highly disappointing review of inheritance tax on trusts between 2012 and 2014.
It is good to see the new consultation document stressing that any system of trust taxation must be fair and neutral, when compared with the same taxes on individuals. But it is disappointing that, in citing in the consultation document particular tax rules “that may constitute exceptions to the principle of fairness and neutrality” HMRC only produce examples of when they think trusts pay less tax than individuals. The reverse is true in many, many cases.” Anthony Nixon - Partner