The Office of Tax Simplification (OTS) have undertaken a detailed review of Inheritance Tax (IHT), which is perceived by many as a complicated tax.
Among many changes, the OTS recommended replacing the current £3,000 annual allowance, marriage allowances and the exemption for regular gifts out of income with a £25,000 personal allowance each year.
There are numerous misconceptions about how the tax operates, particularly in connection with gifts during someone’s lifetime. One of the proposed changes is also to shorten the period for lifetime gifts to be exempt from seven to five years.
The government normally takes account of OTS recommendations and their report is likely to lead to future changes to the rules. We will keep you posted as the changes may necessitate amending your will or further planning to pass on your wealth.
We offer one hour advice clinics free-of-charge if you would like to speak to an expert about your circumstances – you can contact the Tax team on 01242 776000 or email firstname.lastname@example.org.