Reform set to cut complexity of inheritance tax
Reform set to cut complexity of inheritance tax Proposed changes could have far-reaching implications for future estate tax planning Sweeping reform of inheritance tax has been recommended to cut complexity of the so-called ‘death tax’, but experts are warning that individuals will need to review existing planning if the changes go ahead. Headline recommendations to government from the Office of Tax Simplification (OTS) include changing the rules surrounding gifts of cash, property and other assets made while someone is still alive, and an overhaul of the relationship between IHT and capital gains tax for farm and business assets. Proposals include a simplification of the lifetime gift exemptions to a single personal gift allowance, with a revised threshold for small gifts and reform of the regular gift out of income exemption. The OTS also recommends that the current seven-year gifting rule for potentially exempt transfers be cut to five ye...