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

 

UK Tax Advisers Welcome Inheritance Tax Review

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

The Chartered Institute of Taxation (CIOT) has welcomed the announcement that the UK's Office of Tax Simplification (OTS) is to undertake a review of 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."

John Bunker, Chair of CIOT's Succession Taxes Sub-Committee, said: "Modern IHT dates back to the 19th century when the Government introduced estate duty, a tax on the capital value of land. But the rules around it have grown piecemeal and not always in a logical fashion. A thorough review of its calculation and administration is long overdue."

"The review must begin with an understanding that you cannot add simplicity, rather you must remove complexity. It may be beyond the scope of this review, but the creation of an additional residence nil rate band for an estate has undoubtedly added extra complication to the inheritance tax regime. While we recognize this is the deliberate product of a clear government policy objective – indeed a manifesto commitment – we think it worth investigating, in the context of this broader review, whether there are alternative ways of achieving the Government's objectives without adding so much additional complexity to the system."

"Exemptions to inheritance tax are generally a complex area. We see definite potential for simplification here, possibly by a larger annual exemption in place of all the others such as marriage and small gifts. We would also suggest the OTS look at the complex interaction of Agricultural Property Relief and Business Property Relief in its review."

He added: "There is a good case for simplifying how trusts are taxed in relation to inheritance tax. A general review of trust taxation was announced by the Chancellor in the Autumn Budget. How the OTS's review will interact with this remains to be seen. It is important that both the OTS and the wider review do not lose sight of the fact that most trusts are set up for non-tax reasons such as protecting capital and vulnerable beneficiaries."

 



Treaty Updates by Territory

Latest Treaty Updates

Kuwait - Various
19/2/2018

Kuwait's Cabinet approved two DTA protocols with Turkey and Bangladesh, the state news agency reported on February 5, 2018.


Barbados - Australia
19/2/2018

Barbados's Minister of Foreign Affairs and Foreign Trade, Maxine McClean, pushed for the conclusion of a DTA with Australia during recent meetings.


Tunisia - Germany
16/2/2018

According to preliminary media reports, Tunisia and Germany signed a new DTA on February 8, 2018.


Saudi Arabia - Switzerland
16/2/2018

Saudi's Cabinet has approved the signing of a DTA with Switzerland, the state news agency reported on February 6.


Kuwait - Various
16/2/2018

Kuwait's National Assembly on February 2, 2018, approved two DTA Protocols, with India and Brunei, the state news agency reported.


Kazakhstan - India
16/2/2018

According to preliminary media reports, Kazakhstan's President has approved a law to ratify the DTA Protocol signed in January 2017 with India.


Armenia - Singapore
15/2/2018

DTA negotiations between Armenia and Singapore are reportedly close to conclusion.


Azerbaijan - India
15/2/2018

According to a report from the Azeri state news agency, India and Azerbaijan are negotiating a DTA.


Kyrgyzstan - Estonia
15/2/2018

Kyrgyzstan's President on January 25, 2018, ratified the DTA with Estonia.


Slovakia - Various
15/2/2018

According to a new update from Slovakia's Finance Ministry, the nation's DTAs with Armenia and United Arab Emirates became effective on January 1, 2018.


Colombia - Italy
14/2/2018

Colombia and Italy signed a DTA on January 26, 2018.


United Kingdom - Lesotho
14/2/2018

The UK House of Commons on January 31, 2018, approved the DTA with Lesotho.


Honduras - Vietnam
14/2/2018

The President of Honduras has expressed an interest in the country signing a DTA with Vietnam.


Turkey - Venezuela
13/2/2018

Turkey's Economy Ministry on January 25, 2018, announced that Turkey will soon sign a DTA with Venezuela, during the Turkish President's official visit to Venezuela.


Bahrain - Egypt
13/2/2018

According to Bahrain's state news agency, Bahrain's Cabinet on January 22, 2018, approved a law to ratify the country's DTA with Egypt.


Qatar - Spain
8/2/2018

The DTA and accompanying Protocol between Qatar and Spain entered into force on February 6, 2018, following the publication of a law to ratify the agreement in the Spanish Official Gazette on December 15, 2017.


Russia - Belgium
8/2/2018

Russia and Belgium signed a DTA Protocol on January 30, 2018.


Netherlands - Various
8/2/2018

The Netherlands hopes to begin double tax treaty negotiations with Australia, Colombia, Costa Rica, Ecuador, Morocco, Austria, and Portugal this year, according to an update from the Ministry of Finance on January 26. It will also seek to continue negotiations with Andorra, Belgium, Brazil, Chile, France, Liechtenstein, Mozambique, Uganda, Pakistan, Senegal, Sri Lanka, and the United States.


Thailand - Cambodia
2/2/2018

Thailand's tax agency has confirmed the DTA with Cambodia became effective on January 1, 2018.


Bulgaria - Greece
25/1/2018

Bulgaria and Greece have recently agreed to update their double tax agreement to improve its tax information exchange provisions.


Jamaica - Italy
25/1/2018

Jamaica and Italy signed a DTA on January 19, 2018.


Hong Kong - France
22/1/2018

Hong Kong announced on January 15, 2018, that it had entered into a competent authority agreement with France for the exchange of country-by-country reports.


Japan - Iceland
22/1/2018

Japan signed a DTA with Iceland on January 15, 2018.


Czech Republic - Korea, South
19/1/2018

According to preliminary media reports, on January 12, 2018, the Czech Republic and South Korea signed a DTA to replace their existing pact.


Ireland - Kazakhstan
19/1/2018

According to a January 12, 2018, update from the Irish Revenue, the country's DTA with Kazakhstan became effective on January 1, 2018, having entered into force on December 29, 2017.




More Treaty Updates