In November 2018 the Office of Tax Simplification released its report into how to simplify the inheritance tax (IHT) system.
One of its main recommendations was the implementation of a fully integrated digital system for IHT and for changes to be made to the current forms to reduce and simplify the administration of estates. This included a recommendation to introduce very short forms for the simplest estates and updating the conditions that must be met to be able to complete a short IHT form, so as to bring more estates within this short form procedure.
The report also noted other areas of complexity, including the Residence Nil Rate Band and the various gift rules and exemptions. Dealing with estates which involve these areas of taxation can be complicated and the associated IHT calculations are far from straightforward.
There were some interesting statistics to come out of the report. For example, whilst IHT forms were completed for 275,000 estates in the UK in the 2015 to 2016 tax year, each year fewer than 25,000 estates in the UK actually got paid IHT. This means in more than 90% of cases often lengthy IHT forms are completed even when no IHT is due.
Planning your estate and affairs by an experienced solicitor may mean that your estate administration may be removed or simplified. Completing IHT forms can be one of the most time-consuming element of dealing with an estate administration, so the proposal that this form filling process should be removed or simplified for a large number of estates is a welcome one.
Seeking independent advice from an experienced solicitor or professional in planning your estate may minimise any inheritance tax due. Where an estate is complex or where there is the potential for family conflict it is advisable to appoint independent executors who have no interest in the estate. This could be a family friend or a trusted work colleague or professional executors such as an accountant or solicitor.
We highly recommend that you review your will every 3-5 years to ensure that if there are changes in circumstances (i.e review of tax laws, losing touch or falling out with your executor or change in financial circumstances) your will may be changed to accurately reflect your circumstances.
Pishon Gold are proud supporters of The Chartwell Cancer Trust. If you are thinking of leaving a gift to support the work of this charity, we are pleased to offer a 10% discount on our standard will writing service.
For more information contact Pishon Gold Solicitors LB of Bromley on 0208 468 1032 or email firstname.lastname@example.org