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

Kazakhstan - Belarus
23/4/2018

Kazakhstan's President on April 9 signed legislation ratifying a protocol to the DTA with Belarus.


Macau - Vietnam
23/4/2018

Macau's Office of the Chief Executive on April 3, 2018, issued Order No. 63/2018 authorizing the conclusion of a DTA with Vietnam.


Latvia - Chile
23/4/2018

Latvia and Chile discussed launching DTA negotiations during a two-day meeting that concluded on April 10, 2018.


Finland - Hong Kong
23/4/2018

Finland's President on April 6, 2018, authorized the signature of a DTA with Hong Kong.


Austria - Japan
20/4/2018

Austria's Federal Council on April 5, 2018, approved the DTA with Japan.


India - Kazakhstan
20/4/2018

A protocol updating the DTA between India and Kazakhstan entered into force on March 12, 2018, and was published in India's Official Gazette on April 12, 2018.


Finland - Portugal
20/4/2018

Finland is proposing to terminate its existing DTA with Portugal at the start of 2019, should Portugal fail to ratify a replacement DTA negotiated between the two states.


Spain - Finland
20/4/2018

The Spanish Senate on April 11, 2018, approved a DTA with Finland.


Czech Republic - Kosovo
18/4/2018

The Czech Senate on April 4, 2018, approved a law to ratify the DTA being negotiated with Kosovo.


Singapore - Bangladesh
18/4/2018

Singapore on March 13, 2018, announced plans to update the DTA with Bangladesh signed in 1979.


Cambodia - Vietnam
18/4/2018

Cambodia and Vietnam on April 5, 2018, signed a DTA.


India - Zambia
18/4/2018

A DTA between India and Zambia was signed during a three-day visit Zambia ending April 12, 2018.


Kosovo - Saudi Arabia
16/4/2018

Kosovo on April 4, 2018, approved negotiations towards a DTA with Saudi Arabia.


Australia - France
16/4/2018

The Assistance in Recovery clause in the DTA between Australia and France entered into force on April 1, 2018.


Saudi Arabia - Hong Kong
16/4/2018

The Saudi Cabinet on April 3, 2018, approved a DTA with Hong Kong.


Bangladesh - Azerbaijan
12/4/2018

Bangladesh and Azerbaijan on April 6 agreed to speed up negotiations towards a DTA.


Korea, South - Vietnam
12/4/2018

South Korea and Vietnam on March 25 agreed to work towards amending their DTA.


Morocco - Bangladesh
12/4/2018

The Moroccan upper house of parliament on April 5 passed draft Law No. 22.18, endorsing a DTA signed with Bangladesh.


Hungary - Ecuador
5/4/2018

At a March 15 meeting, representatives from Hungary and Ecuador discussed engaging in talks towards the conclusion of a DTA, Hungary's Ministry of Finance reported on March 21, 2018.


Nigeria - Singapore
5/4/2018

On March 21, 2018, Nigeria completed its domestic ratification procedures in respect of the DTA signed with Singapore.


Kazakhstan - Belarus
4/4/2018

Kazakhstan's Senate on March 29, 2018, approved a law to ratify the DTA signed with Belarus.


Kenya - Mozambique
4/4/2018

During a meeting on March 29, 2018, representatives from Kenya and Mozambique agreed the two countries should agree a DTA.


Georgia - Saudi Arabia
30/3/2018

Georgia and Saudi Arabia signed a DTA on March 14, 2018.


Turkmenistan - United Arab Emirates
30/3/2018

Turkmenistan and the United Arab Emirates signed a DTA Protocol on March 15, 2018.


India - Hong Kong
29/3/2018

India and Hong Kong signed a DTA on March 19, 2018.




More Treaty Updates