Simplification of Inheritance Tax Reporting
On ‘Tax Day’ earlier this year (March 23), the government pledged to reduce the reporting requirements for inheritance tax declarations. The regulation change, which follows a review by the Office of Tax Simplification (OTS), will mean that from January 2022, there will no longer be the requirement for over 90 per cent of non-taxpaying estates to complete IHT forms as part of the probate process.
Hopefully, the changes will alleviate some of the administrative burdens of those who need to deal with inheritance tax as part of the process.
Additionally, a temporary measure currently in place that allows those dealing with a trust or estate to provide an inheritance tax return without a physical signature from all those involved will become a permanent change.
The Office of Tax Simplification (OTS), the independent adviser to the government on simplifying the UK tax system, aims to improve the experience of all who interact with tax and improve the administrative process.
In further response to the report, the OTS published a letter it received from the Financial Secretary to the Treasury (FST) on behalf of the Chancellor in response to its first report on Inheritance Tax. You can read it here: FST response to first OTS Inheritance Tax review.
Understanding The Inheritance Tax Threshold
While simplifying the rules is welcome, according to results from a survey carried out for Time Investment's by Consumer Intelligence, most Britons aged 55 and over do not understand what the inheritance tax bill will be when they die.
Among 1,019 individuals who took part in the survey earlier this year, 52 per cent of those aged 55 and above did not know what their IHT would be, and 31 per cent admitted they had never even checked the rules on Inheritance Tax or if it applied to them.
These misunderstandings can lead to families finding out too late that their estates are over the IHT threshold and liable for 40 per cent tax.
Expert Inheritance Tax Guidance
Conversations about what happens to your estate after you die can seem morbid or uncomfortable to think about but are necessary. The sooner you think about it, the better. Our specialist Inheritance Tax Planning solicitors based in Kingston will help you understand the various solutions available to you to protect your estate. We provide expert advice on IHT matters to maximise your tax planning for the benefit of your family whilst ensuring you are acting within the law.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors