OTS calls for overhaul of inheritance tax regime
The Office of Tax Simplification (OTS) has urged HMRC to overhaul the UK’s inheritance tax (IHT) regime.
In January 2018, Chancellor Philip Hammond commissioned the OTS to carry out a review of the IHT regime, and outline ways in which the tax can be simplified.
In its report, which is the first of two, the OTS stated that many individuals’ concerns relate to administrative issues. The report revealed that 38% of those who chose not to use an adviser spent over 50 hours on estate administration. An additional 65% of individuals stated that, despite there being no IHT to pay, they still had to provide ‘significant amounts’ of information.
The OTS has outlined a range of measures designed to ‘help make IHT simpler and easier to understand’. According to the OTS, HMRC should consider implementing a ‘fully-integrated’ digital system for IHT; changing the current IHT forms to ‘reduce and simplify’ the administration of estates; and reviewing its IHT guidance to ensure it is ‘clear, consistent and easy to navigate’.
Commenting on the report, Paul Morton, Tax Director at the OTS, said: ‘It has been hugely positive to have had the benefit of so many personal insights into the experience of dealing with IHT, alongside deep engagement with many professional advisers.
‘This has been key to informing the overview of the tax that the report provides, and will underpin the OTS’s continuing work on its second report.’
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