In the run up to the November budget it was widely speculated that changes would be made to inheritance tax.
Whilst it has had some tinkering around the edges, for example the introduction of the residential nil rate band, which gives an additional allowance where you pass a property which you have lived in as your main residence at some point to a direct descendent, no major changes have been made.
In addition, many of the available allowances have not even increased in line with inflation. For example the annual allowance of £3,000 has been at this level since 1981.
Chancellor Philip Hammond has now asked the Office of Tax Simplification to review inheritance tax to ensure that it is “fit for purpose”.
This is an ideal opportunity for an overall review and simplification of the inheritance tax system, which in certain areas is, in my opinion, overly complex. I hope that the experience of practitioners advising clients on inheritance tax will be listened to.
At the end of the day, all most people want to do is pass on their hard earned wealth tax efficiently and this should be made as easy as possible for them.
It will be interesting to see what the Office of Tax Simplification recommendations are and whether they are listened to.