Another announcement to listen out for in the Spring Budget on March 11 is whether the Chancellor acts on the recommendations of the Office of Tax Simplification (OTS) regarding inheritance tax. As reported in an earlier newsletter, the OTS suggested simplifying inheritance tax on lifetime gifts including reducing the period of potential exemption from 7 to 5 years. Such a change would mean that the donor would only be required to survive for 5 years following a gift for the transfer to be exempt from inheritance tax.
The OTS also suggested that the conditions for Business Property Relief might be tightened up by aligning the rules with the definition of a trading company for Capital Gains Tax. This relief currently provides 100% relief on the transfer of shares in an unquoted company.
The suggested change would mean that more transfers of shares would potentially be liable to inheritance tax and may require a careful review of your plans if you are looking to pass on your business.
Please contact a member of our team if you would like to discuss any of the issues raised. Call: 01782 744144 or email firstname.lastname@example.org.