During the summer, the Office of Tax Simplification (OTS) published a second report in relation to its Inheritance Tax (IHT) review, entitled ‘Simplifying the design of Inheritance Tax’. The report investigates the principal complexities and technical issues surrounding IHT and makes 11 recommendations which the OTS believes would make the tax easier to comprehend and navigate.
SIMPLE AND INTUITIVE
In an effort to streamline gift exemptions, four of the recommendations relate to lifetime gifts, to change the way the tax works in this area to make it simpler and more intuitive for all of us. Another recommendation focuses on the interaction between IHT and Capital Gains Tax.
The accompanying recommendations consider IHT in relation to farms and businesses, addressing distortions in the operation and scope of reliefs such as those for agricultural and business property.
The report was commissioned by the Treasury, who will respond to the recommendations in due course. We’ll keep you posted on subsequent developments.