Inheritance tax (IHT) is set to be included in new anti-abuse rules designed to tackle tax avoidance schemes.
The government launched a consultation on the proposed General Anti-Avoidance Rule (GAAR) on 12 June, which would apply to the main direct taxes and national insurance. It also proposes an extension of the rule to inheritance tax.
The GAAR is based on recommendations made in a report by Graham Aaronsen to HM Treasury last November.
He said that while sensible and responsible tax planning was “an entirely appropriate response to the complexities of a tax system such as the UK’s”, a moderate GAAR would “deter contrived and artificial schemes.”
The consultation document says that unless the GAAR covered inheritance tax, there could be “difficult interactions”, for example if capital gains tax was included in the GAAR and IHT was not.
But it adds: “The government recognises that IHT operates differently to the other direct taxes and has complex interactions with legislation around trusts and estates.
“Arrangements for estates may be put in place a long time before the event that triggers a tax charge. There may, therefore, be particular issues to consider around how the GAAR will operate in relation to IHT.”
The consultation will run for 14 weeks until 14 September, with a summary of responses to be published in the autumn. There will be a further consultation on proposed draft legislation in the autumn with a view to introducing legislation in Finance Bill 2013.
To find out more about how Wilder Coe Ltd can help you, please contact accountants London.
This blog has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this blog without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this blog and, to the extent permitted by law, Wilder Coe LTD, or its Members, Partners, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this blog or for any decision based on it.
Please contact Wilder Coe for further information and bespoke professional advice, tailored to your circumstances, on any matters of specific interest to you.