Will Inheritance Tax Rules change again?

Will Inheritance Tax Rules change again?

Earlier this year the Chancellor and the Financial Secretary to the
Treasury requested that the Office of Tax Simplification (OTS) review
a range of aspects of Inheritance Tax. This will include:

*       Process of submitting Inheritance Tax returns and paying any
tax
*       Rules around lifetime gifts including the annual threshold,
small gifts and normal expenditure out of income
*       Complexities arising from the reliefs
*       The perception of the complexity of Inheritance Tax
*       Other administrative and practical issues that arise in
relation to estate planning, compliance and disclosure and the probate
procedure.

One of the major issues with Inheritance Tax is the process and there
are considerable delays at HMRC once forms are submitted and the
administration of Inheritance Tax is the Chancellors primary target
with the review. Simplification of the reporting process would be
welcomed, not only by professionals but by the public facing these
delays, but how could any other changes impact you?

Given the OTS have been asked to look  at how gift rules interact with
the wider Inheritance Tax system along with the complexities arising
from reliefs there is growing concern that Agricultural Property
Relief and Business Property Relief will be looked at and could be
changed.

Under the current regime Agriculture Property Relief can mean that
Agriculture benefits from up to 100% relief from Inheritance Tax on
any qualifiying assets. This allows farming families to pass on their
farms to the next generation without Inheritance Tax being paid.
Business Property Relief works in a similar way, albeit with different
rules. Changes or rewmoving this relief could not only mean families
are unable to pass down their farms or business to the next
generation, but it could also cause a drop in the value of
agircultural land.

The OTS is due to make it’s report in Autumn, ahead of the next budget
in late November or early December. While the OTS will make
reccomendations it will be the Chancellor who is responsible for the
final decision on any tax policy.