{"id":19569,"date":"2019-08-08T15:04:32","date_gmt":"2019-08-08T15:04:32","guid":{"rendered":"https:\/\/smh.group\/?p=19569"},"modified":"2023-02-15T13:50:10","modified_gmt":"2023-02-15T13:50:10","slug":"time-to-overhaul-inheritance-tax","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/time-to-overhaul-inheritance-tax\/","title":{"rendered":"Time to overhaul inheritance tax?"},"content":{"rendered":"\n<p><strong>July\nsaw the publication of the long-awaited second report on inheritance tax (IHT)\nfrom the Office of Tax Simplification (OTS) with a range of useful proposals. <\/strong><\/p>\n\n\n\n<p>Focused on simplifying\nthe structure of IHT, the report, contained some surprises, not only in the\nrecommendations it makes, but also in those areas it has left untouched. <\/p>\n\n\n\n<p><strong>A new take on gifts<\/strong><\/p>\n\n\n\n<p>The OTS suggests that\nthe annual exemption (\u00a33,000 since 1981) and the wedding gifts exemption (a\nmaximum of \u00a35,000 and a minimum of \u00a31,000, unchanged since 1975) should be\ncombined into a single \u2018personal gift allowance\u2019. While no specific number was\npinned on the new allowance, the OTS did note that the annual allowance would\nbe \u00a311,900 in 2019\/20, had it been inflation proofed. <\/p>\n\n\n\n<p>Currently you need to\nsurvive seven years for any lifetime gifts not to form part of your estate on\ndeath and, in some instances, gifts made up to 14 years before death could\naffect the level of tax payable. The OTS says that only gifts made within <em>five<\/em> years of death should be relevant. That sounds like good news, but\nthere is a sting in the tail: the OTS wants to scrap taper relief, which currently\nreduces the tax payable \u2013 if any \u2013 on gifts made more than three years but less\nthan seven years before death. <\/p>\n\n\n\n<p><strong>Revising reliefs<\/strong><\/p>\n\n\n\n<p>While the paper\ndiscusses the criticisms received about the complexities of the relatively\nrecent residence nil rate band (RNRB), the OTS says it is too early to propose\nany changes. However, it does quote an HMRC estimate that for the same tax\ncost, scrapping the current \u00a3150,000 RNRB would only allow the main nil rate\nband to be increased by \u00a351,000. <\/p>\n\n\n\n<p>The OTS paper discusses\nthe availability of 100% business relief for holdings of AIM shares, but to the\nsurprise of some does not propose the relief\u2019s withdrawal. However, it does\nmake some recommendations about business relief generally and its twin, agricultural\nrelief, which could have a major impact. <\/p>\n\n\n\n<p>The OTS report will now\nbe considered by the (new) Chancellor. What changes Mr Javid puts through will\nin part depend upon parliamentary arithmetic and for how long the government\nsurvives. In the event of a Labour Party win in a potential general election,\nIHT could be replaced by a much harsher lifetime gifts tax.<strong> <\/strong>All of which means that if you are thinking about estate planning,\nwaiting for the dust to settle could be a risky strategy. <\/p>\n\n\n\n<p>If you need to discuss your affairs with one of our&nbsp;<strong><a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/chartered-accountants\/\">Accounting &#038; Business Advisory<\/a><\/strong>&nbsp;drop us a line on&nbsp;<strong>0114 266 4432<\/strong> or&nbsp;<strong><a href=\"mailto:info@smhca.co.uk\">info@smhca.co.uk<\/a><\/strong>. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>July saw the publication of the long-awaited second report on inheritance tax (IHT) from the Office of Tax Simplification (OTS) with a range of useful proposals. Focused on simplifying the structure of IHT, the report, contained some surprises, not only in the recommendations it makes, but also in those areas it has left untouched. A new take on gifts The OTS suggests that the annual exemption (\u00a33,000 since 1981) and the wedding gifts exemption (a maximum of \u00a35,000 and a minimum of \u00a31,000, unchanged since 1975) should be combined into a single \u2018personal gift allowance\u2019. While no specific number was pinned on the new allowance, the OTS did note that the annual allowance would be \u00a311,900 in 2019\/20, had it been inflation proofed. Currently you need to survive seven years for any lifetime gifts not to form part of your estate on death and, in some instances, gifts made up to 14 years before death could affect the level of tax payable. The OTS says that only gifts made within five years of death should be relevant. That sounds like good news, but there is a sting in the tail: the OTS wants to scrap taper relief, which currently reduces [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":17169,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-19569","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","category-chartered-tax-advisers"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Time to overhaul inheritance tax? - SMH Group<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Time to overhaul inheritance tax? - SMH Group\" \/>\n<meta property=\"og:description\" content=\"July saw the publication of the long-awaited second report on inheritance tax (IHT) from the Office of Tax Simplification (OTS) with a range of useful proposals. Focused on simplifying the structure of IHT, the report, contained some surprises, not only in the recommendations it makes, but also in those areas it has left untouched. A new take on gifts The OTS suggests that the annual exemption (\u00a33,000 since 1981) and the wedding gifts exemption (a maximum of \u00a35,000 and a minimum of \u00a31,000, unchanged since 1975) should be combined into a single \u2018personal gift allowance\u2019. While no specific number was pinned on the new allowance, the OTS did note that the annual allowance would be \u00a311,900 in 2019\/20, had it been inflation proofed. Currently you need to survive seven years for any lifetime gifts not to form part of your estate on death and, in some instances, gifts made up to 14 years before death could affect the level of tax payable. The OTS says that only gifts made within five years of death should be relevant. 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