Developments in Inheritance Tax Planning
Since the introduction of the Government’s Transferable Nil Rate Band Allowance for spouses in Oct 07 there has been speculation on the likelihood of significant rises in the threshold amount, currently at £325,000 per individual and frozen at this level until the end of the tax year 2014-15.
The 2012 Budget included an announcement that the indexation of the Inheritance Tax NRB is to be switched from the retail prices index to the Consumer Prices Index (‘CPI’), signalling the likely end of these significant rises in threshold amount.
The changes are scheduled to begin from the tax year 2015/16, using the CPI increase for the year to September 2014.Inheritance Tax planners should make sure that they make full use of the permitted tax allowances and gifting as well as the significant benefit offered by the spousal exemptions and transferable allowance.
The latest consultation aimed at extending the General Anti-Avoidance Rule to provide for a General Anti-Abuse Rule to all ‘main direct taxes’ from 2013 further emphasises the government’s intention to deter “contrived and artificial schemes” and to protect “the centre ground of responsible tax planning”
We advise all clients to seek our advice on matters of tax planning and to ensure that the key documentation required by HMRC in order to take advantage of such schemes is carefully preserved for future use.