The Office of Tax Simplification has now put forward its recommendations for making inheritance tax (IHT) simpler to understand and more intuitive to operate.
Chancellor Philip Hammond asked the OTS to carry out a review into IHT last year. After collecting evidence, the OTS published its first report on the administration of IHT in November.
Earlier this month, it issued its second report and made 11 recommendations to make the tax more coherent and easier to understand.
Here, Technical Connection's Tony Wickenden talks us through the key proposals:
He discusses the headline recommendation to reduce the period where IHT applies to gifts made within seven years of death to five years, and the proposal to replace the various small annual gift exemptions to a single personal gift allowance.
Tony also explains the other main recommendations, including:
- Proposed changes to the normal expenditure rules;
- Making term assurance policies automatically IHT-free on the death of the assured without the need for a trust; and
- Tackling the uncertainty around pensions transfers made in ill health and where the individual then dies within two years of the transfer.
Through Techlink Professional and Techlink Communicator we enable you to:
- Be better informed
- Reduce risk
- Do more business
- Communicate better and smarter
- Save time