Measures to ‘simplify’ trust charges delayed

  • February 02, 2014
  • By Hunters Law

HMRC’s proposals to ‘simplify’ the calculation of inheritance tax charges on ‘relevant property’ (e.g. discretionary) trusts have been put on hold until at least 2015.

The proposals, which included the introduction of a flat rate of 6% on ten-year anniversary and exit charges, and the division of the nil rate band between all relevant property trusts made by the same settlor, met with strong opposition from private client trust practitioners.

The general view was that the proposals were unfair in their retrospective application to existing trusts, and that the measures would merely swap one onerous regime for another rather than provide much coveted simplicity.  A further concern was that any purported simplicity would come at the expense of higher tax charges.

HMRC have accepted these comments for the time being, but remain committed to simplifying the charges.  They will look at this again with a view to including legislation in the Finance Bill 2015.  However, it remains to be seen if HMRC will pursue their proposals for a flat rate of tax and for a division of the nil rate band.

As any changes could have a profound effect on the taxation of relevant property trusts, trustees are advised to ‘watch this space’.

If you would like more detailed advice on the taxation and administration of trusts, please contact the partner at Hunters having responsibility for your legal matters, or (for new enquiries) please contact a member of our Private Client team.

This article is based on the law as at 2nd February 2014.  Although we endeavour to ensure that the content is accurate and up to date as at that date, it is designed to provide general guidance only and is not intended to be comprehensive or to constitute professional advice.  Specific advice should always be sought, and you should only rely on advice which is given, by reference to particular facts and circumstances.

Related News

Mar 29, 2021
Jonathan Gemmell’s summary of the Budget and Tax Day Announcements for Private Clients
Mar 25, 2021
Constance Tait and Julia Richards discuss the importance of making a Lasting Power of Attorney
Feb 09, 2021
Molly Wills discusses The Office of Tax Simplification’s First Report on Capital Gains Tax, in Private Client Business
Jan 06, 2021
Molly Wills discusses The Office of Tax Simplification’s review of Capital Gains Tax
Nov 30, 2020
Julia Richards examines section 33 of the Wills Act 1837 in WealthBriefing
Nov 13, 2020
Julia Richards examines section 33 of the Wills Act 1837 in the case of Re estate of Ellen Beatrice Brackstone [2020]
Oct 29, 2020
Julia Richards examines Section 33 of the Wills Act 1837
Oct 28, 2020
Daniel Watson examines Wills being witnessed remotely by video-link in Taxation
Sep 21, 2020
Hunters recognised as one of the 2020 eprivateclient Top Law Firms
Sep 04, 2020
Matthew Yates comments on video wills in the Financial Times

© Hunters Law LLP 2021 | Privacy NoticeLegal & Regulatory | Cookies Policy | Complaints Procedure.

Hunters Law LLP is authorised and regulated by the Solicitors Regulation Authority (number 657218)