CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.

 

UK Launches Inheritance Tax Review

by Jason Gorringe, Tax-News.com, London
01 February 2018

The UK's Office of Tax Simplification (OTS) has been tasked with investigating options for reform of the UK's inheritance tax.

Philip Hammond, the UK Chancellor of the Exchequer, addressed the OTS in a letter sent January 19, 2018, asking to hear of its proposals for simplification, "to ensure that the system is fit for purpose and makes the experience of those who interact with it as smooth as possible."

He instructed the OTS that the review should focus on technical and administrative issues, such as the process of submitting returns and paying tax due, as well as practically issues around routine estate planning and disclosure.

He suggested it could also look at how current gift rules interact with the wider IHT system and whether the current framework causes any distortions to taxpayers' decisions surrounding transfers, investments, and "other relevant transactions."

Commenting on the start of the review, professional services firm RSM noted that in November 2017 HMRC had published a report into behavioral evidence around inheritance tax and reliefs.

George Bull, a senior tax partner at RSM, said: "The conclusions of this report may signal an expectation in Government that the entitlement to business property relief in particular may be curtailed in the course of the current review." He said: "It is also important to review IHT in the context of the competing and wide-ranging regimes elsewhere in the world. The US is one of the more extreme examples where potentially up to USD22m can be passed to the next generation tax-free."

Geoffrey Todd, a partner in the private client and tax team at law firm Boodle Hatfield commented: "As the Chancellor noted, IHT is a particularly complex tax and the current system is rife with inconsistencies. Any genuine simplification of the way it operates and is administered and which helps ease frustrations and delays in settling IHT-related matters with HMRC has to be welcomed provided that fairness is also maintained. Particular areas which would benefit from simplification include the taxation of lifetime gifts, the recently introduced residence nil rate band, and the IHT taxation regime for trusts."

"We will know more about the precise scope of the investigations when the terms of reference of the review are agreed in the coming weeks. It will be interesting to see how this ties in with the Government's planned consultation on how to make the taxation of trusts 'simpler, fairer, and more transparent,' announced at the Autumn Budget. The consultation and OTS review taken together could lead to real change, although this is at least a year away."

 



Treaty Updates by Territory

Latest Treaty Updates

Russia - Belgium
14/8/2018

On August 3, 2018, Russia ratified the protocol to the DTA with Belgium.


Belarus - United Kingdom
14/8/2018

On July 27, 2018, the DTA between Belarus and the United Kingdom entered into force.


Russia - Japan
13/8/2018

On August 3, 2018, Russia ratified its pending DTA with Japan.


Taiwan - Spain
13/8/2018

On July 30, 2018, Taiwan expressed its desire to negotiate a TIEA with Spain.


China - Chile
9/8/2018

On May 29, 2018, China and Chile signed a DTA.


Ecuador - Switzerland
9/8/2018

On August 1, 2018, Ecuador ratified the pending Protocol to the 1994 DTA with Switzerland.


Colombia - Japan
6/8/2018

In a bulletin released on July 30, 2018, Colombia's Ministry of Finance announced that negotiations on the country's prospective DTA with Japan have been concluded.


Kosovo - Austria
6/8/2018

On July 27, 2018, Kosovo ratified the DTA signed with Austria.


Bosnia and Herzegovina - Malta
30/7/2018

According to a Maltese Government press release on 24 July, 2018, officials from Bosnia and Herzegovina and Malta are negotiating a DTA.


Cyprus - United Kingdom
30/7/2018

On July 18, 2018, a DTA between Cyprus and the United Kingdom entered into force.


Brazil - Lithuania
26/7/2018

During a meeting held in Brazil on July 17, 2018, representatives of the Brazilian and Lithuanian governments engaged in negotiations on a prospective DTA between the two countries.


United Kingdom - Belize
26/7/2018

The UK Government on July 23, 2018, published a consolidated version of the twice amended Belize-UK DTA.


United Kingdom - Mauritius
25/7/2018

On July 13, 2018, an amending protocol signed in February between the United Kingdom and Mauritius entered into force.


Finland - Various
25/7/2018

Finland's President on July 13, 2018, approved the signature of a Protocol to the 1996 DTA with the Nordic countries: Finland, Denmark, the Faroe Islands, Iceland, Norway, and Sweden.


India - Armenia
23/7/2018

India's Ministry of Finance published a notification declaring that the protocol signed on January 27, 2016, amending the country's 2003 double tax treaty with Armenia, entered into force on June 14, 2017. The notification was published in the Gazette of India on July 5, 2018.


Vietnam - Algeria
23/7/2018

During a meeting held in Hanoi on July 13, 2018, representatives from Vietnam and Algeria discussed potentially negotiating a DTA.


Maldives - Singapore
23/7/2018

On July 14, 2018, the tax authorities of Maldives and Singapore concluded a first round of negotiations on a prospective DTA.


Kenya - Portugal
18/7/2018

On July 10, 2018, officials from Kenya and Portugal signed a DTA.


San Marino - United Arab Emirates
18/7/2018

On July 11, 2018, San Marino and the United Arab Emirates signed a DTA.


United Arab Emirates - Various
26/6/2018

The UAE's Cabinet on June 13, 2018, approved DTAs signed with Saudi Arabia, Rwanda, and Turkmenistan.


Morocco - Azerbaijan
26/6/2018

A law to ratify the Azerbaijan-Morocco DTA was tabled before Morocco's Cabinet on June 14, 2018.


Qatar - Argentina
26/6/2018

Qatar's Government on June 14, 2018, confirmed that it had completed its domestic ratification procedures in respect of a DTA signed with Argentina.


Ukraine - United Kingdom
26/6/2018

Ukraine's Cabinet on June 6, 2018, approved a law to ratify a DTA Protocol signed with the United Kingdom.


Luxembourg - Vietnam
25/6/2018

Luxembourg and Vietnam agreed to continue negotiations towards a DTA Protocol at a June 15 meeting.


Sweden - Switzerland
25/6/2018

Sweden's Parliament on June 7, 2018, approved an amendment to the country's DTA with Switzerland to clarify the scope of the term pension fund in the agreement.




More Treaty Updates