The Chanceller has initiated an â€œIHT General Simplification Reviewâ€ that has led now to a call for evidence, as published on 27 April. If you want to have your say, you need to do so by 8 June.
The document has 20 questions, spread across seven categories, which is interesting as an indication of where IHT may go in future:
- IHT forms, administration and guidance;
- Lifetime gifts to individuals;
- Farming businesses;
- Charitable giving;
- Other areas of complexity; and
- Wider IHT system.
IFAs are a rich vein of inheritance stories, as they spend so much time helping customers plan for the tax.
Many IFAs will be aware of the farming exemptions, where the super rich are now buying farmland at four times the price of twenty years ago, often just for IHT relief with single farm payment subside an added bonus. James Dyson is a name bandied about in cattle markets in the West of England, and in farm machinery exhibitions in the more arable East of our country as he is now one of the UKs biggest landowners.
Another familiar sight to IFAs is fine antiques gathered up by those looking to pass assets on. Often these remain uninsured, with no known record or traceability and are thus passed between generations seamlessly. Clearly a professional cannot advise a customer not to insure their furniture. But if you do the premiums are, perhaps, one per cent per annum, with a forty per cent tax-kick at the end.
As Church Warden I see a lot of charitable giving, and these are very often arranged by deed of variation by executors to fit in with tax arrangements, or following advice from solicitors or accountants or IFAs. Some are assets gifted, which avoid capital gains, although the charity then misses out on planned giving relief.
In a recent case locally of an elderly lady who died with no children, each of the 18th Century Oil pictures in her house had a label on the back of â€“ naming who she would like to receive the asset. Mostly these were friends who had helped her in life or distant family. Mysteriously these disappeared the day after her death, as did any recent will, and her sizeable estate passed to a former evacuee resident, who had gone back to her own London family after the second world war blitz had ended. An updated will was never found despite extensive phone calls to nearly all local solicitor firms â€“ and local tongues continue to wag.
By Charlie Llewellen Palmer