Following recommendations by the Office of Tax Simplification it is now expected the government will announce a complete review of inheritance tax in the next budget.
A report published by the OTS last week said “on the basis of the low number of estates caught by IHT and the useful but relatively low revenues [after reliefs] that it raises, we consider that a more appropriate approach may be to review the whole of IHT rather than to consider individual IHT reliefs. Such a review may also encompass a review of capital gains tax and we envisage this as a longer term project.”
Carl Marston Head of Wills, Trusts and Estates for leading Chester law firm Hillyer McKeown commented “I would expect that the chancellor will announce a consultation period and review the system and that this is likely to result in an increase in tax revenue. Although the inheritance tax threshold has been frozen at £325,000 since 2009 the revenue generated from inherited estates fell dramatically in the last two years of the labour government”.
Carl continued, “This was partly due to the fall in house prices, but also as the then chancellor Alistair Darling allowed married couple and civil partners to transfer unused inheritance tax allowance from a deceased spouse to the surviving one”.
Carl advised “Although this announcement would appear to contradict previous assurances given by the Conservatives it is, at least, expected that any changes will not be retrospective so there is every reason why you should make your Will and review your existing arrangements to maximise the advantages of the current system.”
You can contact Carl at Carl.Marston@law.uk.com
