IHT Trusts Allowance Proposed by HMRC, IHT system, Inheritance Tax

HMRC has aimed to reduce the complexity of the current IHT system by allowing individuals to split their £325,000 nil rate band between multiple trusts.

The move will allow individuals to split the nil rate band across a number of trusts, providing that the trusts are created on different days. Married couples will also be given better options to allocate their £650,000.

The reform is expected to come into force in April 2015. However, to mitigate against people taking advantage of the current system before the new rules come into effect, HMRC proposes to apply them from 6th June 2014.

Essentially, HMRC’s reforms will mitigate against the advantage of estate planning with trusts instead of estate planning with wills.

The rules will also reduce the future tax deficit when large estates are protected across multiple trusts. The consultation on the reforms will cease in August this year.

Forths tax investigations professionals can assist in all types of investigations brought by HMRC. If you have received contact from HMRC you should seek professional advice at the first opportunity.

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