Inheritance tax overhaul would remove useful exemptions
James Ward, head of our private client team, comments in the FT, following the Office of Tax Simplification's proposal for a major shake-up of the inheritance rules.
He makes the point that:
Say a husband were to die and leave a buy-to-let flat to his wife. (Under the current rules) there is no inheritance tax due to the spousal exemption."
The current CGT uplift rules allow the wife to sell the property using the date of death value as the base cost. However, under the OTS proposals, there would be a capital gains tax bill based on the husband's original acquisition costs.
This takes out a particular strong area of planning and would make it harder for people to sell property without a substantial capital gains tax bill."
To read the full article in The FT, click here.
Additionally, James spoke to Accountancy Age on the same topic, commenting that:
Overall, while some of the changes proposed by the OTS are welcome and sensible, some - like the proposal to remove excess income exemption and the uplift in base cost on death - will see tax mitigating tools removed for wealthy clients.
However, the reduction of the seven-year gifting rule trumps it all and will make gifting that little bit easier (either to survive or to insure against)."
The full article can be viewed in Accountancy Age here.
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