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Law Society responds to IHT trusts consultation

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The Law Society has published its responses to HMRC’s consultation on trust IHT charges, giving a qualified welcome to the proposed ‘settlement nil-rate band’, but recommending a method by which trustees can use any unallocated portion. Further recommendations include:

  • aligning the filing date with self-assessment by reconsidering the FA 2014 changes;
  • removing amounts subject to exit charges in the previous ten years from the calculation of subsequent ten-year charges; and
  • abolition of the charge for age 18–25 trusts.

In its response, the Law Society said: ‘We are pleased to see the clear statement of HMRC’s policy aim, which is: “to achieve simplification and reform without jeopardising exchequer revenue and to reduce unnecessary complexity and administrative burdens for trustees and practitioners where it is feasible to do so”. It is disappointing however that, despite this aim, five of the six factors will, under the proposals in the consultation document, continue to apply to trusts already in existence on 6 June 2014, and four will still apply to trusts to which the new regime is intended to apply. The proposals we set out in this paper, if implemented, would reduce these figures by one in each case, so that from 6 April 2015, just four of these factors would apply to “old trusts” [relevant property trusts in existence on 6 June 2014] and just three to “new trusts”.’

Issue: 1230
Categories: News , IHT , Private client taxes