{"id":72165,"date":"2019-07-22T13:39:37","date_gmt":"2019-07-22T13:39:37","guid":{"rendered":"https:\/\/www.templewealth.co.uk\/?p=72165"},"modified":"2019-07-22T13:40:26","modified_gmt":"2019-07-22T13:40:26","slug":"inheritance-tax-rules","status":"publish","type":"post","link":"https:\/\/www.templewealth.co.uk\/inheritance-tax-rules\/","title":{"rendered":"Is more change on the horizon for the already complicated inheritance tax rules?"},"content":{"rendered":"\n

This month, The Office of Tax Simplification (OTS) launched their latest report. The topic this time was inheritance tax.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The\nOTS does not consider policy issues such as should a tax abolished – they\ninstead look at the administrative side of taxation. <\/p>\n\n\n\n\n\n\n\n

This second report from the OTS<\/a>, following the release of its first report in November 2018, was requested by the chancellor in January 2018 for a review of inheritance tax (IHT) with the aim of simplification. In their first report last year the OTS recommended the government implement a digital system for IHT to add the ability to complete and submit a probate application.   <\/p>\n\n\n\n

So, what was in the last report?<\/h4>\n\n\n\n

This blog looks in brief at a few of the topics covered. <\/p>\n\n\n\n

The OTS recommended that fewer people pay tax on gifts given\nshortly before death to cut down on administration.   This would mean that assets given away more\nthan five years as opposed to seven years before the original owner died are\nnot subject to inheritance tax.<\/p>\n\n\n\n

The OTS has also proposed changes to the rules surrounding lifetime gifting. It suggests simplifying the IHT-free gift allowances by replacing them with just one allowance per person. They didn\u2019t say what that allowance should be. <\/p>\n\n\n\n

The normal\nexpenditure out of income exemption is little used but can be a useful Inheritance\nTax planning tool. Individuals can give away money from their income free of IHT\nif the gift is made on a regular basis and does not affect their standard of\nliving. The seven-year rule does not apply here. <\/p>\n\n\n\n

For example…<\/h4>\n\n\n\n

Older people with final salary schemes and low living costs may pass down wealth during their lifetime, reducing their estate\u2019s IHT liability at the same time. The OTS recognised that this is a complicated allowance and requires careful record keeping. It is even more complicated at present, if planning is being done using a Power of Attorney. <\/p>\n\n\n\n

The\nOTS has also recommended that death benefit payments from term life insurance\npolicies are free of inheritance tax (IHT) on the death of the life assured,\nwithout being written in trust. Not enough term\nlife insurance policies are written in trust, despite the advantages of doing\nso, meaning that death benefit payments often form part of the deceased’s\nestate and so are potentially subject to IHT. The OTS did acknowledge that\nthese death benefits will often be covered by the spouse exemption or the nil\nrate bands. <\/p>\n\n\n\n

The incoming cabinet and any new chancellor are likely to be preoccupied\nwith other issues and may not have the time nor the political capital to tackle\nsuch a sensitive area as inheritance tax. In the meanwhile, nothing has changed,\nand clients are best advised to stay in touch with their independent adviser to\nmonitor developments.<\/p>\n\n\n\n

\"\"<\/figure>
\n

To discuss how inheritance tax might affect you, call one of our independent financial advisers, Chris Wilson, on 01329 282882. You can also send us a message using our Contact Us<\/a> or Facebook <\/a>page. <\/p>\n<\/div><\/div>\n\n\n\n

Levels and bases of taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate tax planning.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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