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23 Mar 2011
INHERITANCE TAX has divided experts after George Osborne announced a 10% relief for those who give at least 10% of their estate to charity.
The Office of Tax Simplification had recommended an in-depth review of IHT, but today's Budget made no mention of it.
Richard Mannion, national tax director at Smith Williamson, said he is "very disappointed", claiming the levy is "crying out for revision", and the 10% incentive for charity donors will result in little behavioural change.
But John Whiting, head of the OTS and author of the report, dismissed the suggestion that the chancellor has swept IHT reform under the carpet.
He welcomed Osborne's decision to review tax reliefs, and says the government could well return to the issue of inheritance tax reform in the future.
Stephen Herring, senior tax partner at BDO, said the missing IHT review was not significant, instead flagging up the 10% tax relief for charity givers.
He claimed this is a significant move, arguing it will nudge donors to give more of their estate to worthy causes, and IHT will "be on the backburner for quite some time".
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10% on what?
I am just wondering if it is 10% of your whole estate that you have to give to qualify for the 10% in reduction of IHT? eg your estate is £525k so do you have to give £52,500 to get a reduction of £8,000 in your tax bill? current rate at 40% is £80,000 compared with 36% is £72,000. Is there a real incentive to do so since the average house price in some places is actually more than £300,000 in the first place!
Posted by: Tim Dunton, 24 Mar 2011 | 07:14