In July 2019 the Office of Tax Simplification published their second report with recommendations as to the simplification of certain aspects of IHT. Although some recommendations could be beneficial in reducing the IHT burden for some, there are several recommendations which would lead to material increases in future IHT and CGT liabilities.
There’s no doubt that avoiding pitfalls and taking advantage of relevant reliefs requires intricate planning, but that planning can produce significant savings. Over the past few years there have been new anti-avoidance measures, but also some practical savings measures like the Residential Nil Rate Band and the measures to transfer unused nil rate bands between spouses. IHT planning has not got simpler as a result!
For many people IHT planning begins far too late. Assets are collected through one’s lifetime and many are pregnant with substantial gains at the point that gifting becomes important. The CGT consequences of lifetime gifting can be a significant barrier to effective IHT planning.
The OTS recommendations may lead to simplification of some complex rules and intricate allowances, but we feel more of their recommendations will raise taxes for clients as opposed to lowering them.
Our key recommendations in respect of IHT planning are start early and start small. Take those initial incremental steps you’re comfortable with and then keep everything under regular review.
Should you have any queries or questions in respect of the above, please reach out to your usual Arnold Hill & Co contact, call our mainline on 0207 306 9100 or email our general address - info@arnoldhill.co.uk
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.