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Trust tax reform

12 January 2021 / Judith Millar
Issue: 4775 / Categories: Comment & Analysis
35529
Trusts: what next?

Key points

  • HMRC has yet to respond to comments on its 2018 trust tax consultation.
  • Two reports from the Office of Tax Simplification but few conclusions on trusts.
  • All-party parliamentary group report recommended replacing inheritance tax with a gift transfer tax.
  • How a proposed one-off wealth tax would affect trusts.
  • The government should recognise the importance of trusts in the legal system.

In the autumn Budget in November 2017 the chancellor of the exchequer Philip Hammond announced the government’s commitment to consult on ‘how to make the taxation of trusts simpler fairer and more transparent’. A couple of months later in January 2018 he asked the Office of Tax Simplification (OTS) to carry out a review of the administrative and broader technical aspects of inheritance tax.

In response in November 2018 HMRC launched a consultation The taxation of trusts: a review (see tinyurl.com/hmrctrcondoc2018). The OTS followed ...

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