Chancellor Philip Hammond has written to the Office for Tax Simplification (OTS) requesting a review of the IHT system.
Hammond has requested that the OTS seeks to identify areas where this particularly complex system could be simplified, removing some of the technical and administrative burdens experienced by users of the system. The letter included a need to look at current gift rules and ‘whether the current framework causes any distortions to taxpayers’ decisions surrounding transfers, investments and other relevant transactions’.
No indication has been given as to whether the current 40% rate of IHT will be increased or decreased. Whilst we agree that the complexities of the system do need to be disentangled and made clearer for all users of the system, we have to ask if the Chancellor’s motives are purely for simplification. Rising property prices have resulted in a significant rise in the amount of death taxes being collected, and amidst economic instability, there are fears that Hammond’s requests for ‘simplification’ could actually be a further raid on the middle classes to generate more tax.
At CBW, our IHT experts work with our clients to unravel the complexities of estate planning and ensure that IHT liabilities are reduced where possible. Please click here for more information or to request a meeting to discuss your IHT planning requirements.