A regional expert has warned that it is likely we will see changes to inheritance tax legislation, in a move that could affect thousands of people in the region.
Currently, two major ways in which inheritance tax relief is granted are the transferable ‘nil rate band’ for married couples which was brought in during 2009, and 2017 changes which saw a residence nil rate band established.
But Kathryn Harwood, head of Wills & Estate Planning at Napthens solicitors, warns that both methods of relief are complex, with many families ending up paying more tax – particularly following the death of both parents.
This is often because assumptions are made about the way the relief is granted, and professional advice was not consulted in good time, with tax saving opportunities lost as a result. Complex arrangements are often needed to be made via a Will to ensure tax relief is available.
Kathryn reports that the combination of more complicated taxes, and people trying to save money on professional fees, has led to an estimated 35 per cent increase in the number of disputes related to Wills and probate heard in the High Court during 2017.
Chancellor Philip Hammond recently ordered the Office of Tax Simplification to carry out a review into the issue, and many in the industry expect changes to be made.
Kathryn said: “As well as simplifying the rules around the transferable and residence nil rate bands, we’re expecting to see agricultural property relief for farmland and buildings, and the long-standing rules about giving cash gifts to also come under scrutiny.
“We would welcome a simplification of the rules, but reviews of tax legislation often result in the taxpayer paying out more, so the need for careful planning and specialist advice will remain as important as ever.
“The industry will be watching the review with interest to see how it affects consumers in the region.”