10 July 2019
Over the last couple of years, Inheritance Tax has been gently under the spotlight, getting mentions during budget speeches, its own tax avoidance regime rules, and generally becoming recognised by the government as a valuable route to extracting money from the public at large.
On 4 July the Office for Tax Simplification published its latest report on how the IHT system might be simplified.
The report makes for interesting reading (if, like me, you’re interested in such things) and summarises (on page 13, if you’re less interested) its 11 key recommendations.
The traditional passage of these reports has been for the OTS to spend 12 months researching and coming up with suggestions, the Chancellor of the day saying “thanks very much” and then depositing the findings in his cylindrical filling cabinet before pressing on with his own agenda.
On the one hand, this could be different, given that Philip Hammond not only asked for the review to be carried out, but actually legislated for it to be laid before Parliament.
On the other hand, Brexit, Brexit, Brexit Brexit, and Brexit are probably making it hard for policy makers to do even the simplest things at present and with the imminent change of Prime Minister, who knows if Mr Hammond will even be in number 11 when the next Budget rolls around.
So does the report tell us anything worth knowing?
Well, it shows the areas of IHT which the OTS consider are worthy of review. And it gives a steer on the gaps between public perception and the reality of inheritance tax, almost every section of the report concluding that this is a widely misunderstood and complex area.
It also shows that the OTS now do snazzy infographics and YouTube summaries of their findings – the ven diagram below taken from annex E of the report.
We’re not doctors or magicians, so we can’t offer advice on staying out of the green circle, but to find out how best to stay out of the blue please contact me or your local tax adviser.
