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The latest consultation on calculating charges could be the final nail in the coffin
KEY POINTS
- HMRC’s proposals to change to the tax treatment of pilot trusts appear to be driven by their wish to make them an unattractive proposition.
- Taxpayers will be entitled to a new settlement nil-rate band in addition to their nil-rate band.
- Some historical detail will be removed from the computational charge which may help with simplification.
- The rate of charge for all trusts will be fixed at 6% which may add to clients’ tax bills rather than reduce them.
- Alternatives to trusts may prove attractive.
It is tempting for a busy practitioner snowed under by work and the Finance Act to give little more than a cursory glance to the consultation document Inheritance tax: a Fairer Way of Calculating Trust Charges (published on 6 June) that proposes changes...
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