Treasury puts kybosh on inheritance tax planning schemes of the wealthy
However, as a report in The Telegraph reveals, the Treasury is expected to put an end to this by levying a charge on total assets in all trusts held by a family.
A public consultation on the inheritance tax planning proposals is currently underway, but industry experts firmly believe that HM Revenues and Customs (HMRC) will bring in the new measures as soon as possible.
In the consultation paper, HMRC said, “People currently benefit from the use of multiple trusts because if they are not created on the same day they are not related settlements for inheritance tax purposes. Under a more simplified regime our proposal is to split the nil-rate band between all relevant property settlements.”
It is expected that the rule changes will be brought in as part of the Finance Bill in 2014 and will apply not only to new trusts, but to existing multiple trusts.
Tax experts say that tens of thousands of people currently have more than one trust from related property inheritance and will be charged thousands of pounds as a result if the change goes ahead.News