HMRC clarifies reach of new IHT charge

HMRC clarifies reach of new IHT charge

CIOT welcomes clarification

Gifts by parents and grandparents to children under 18 will not be subject to
a new inheritance tax charge, HM Revenue
& Customs
has finally confirmed.

Because of uncertainties introduced by last year’s trust tax changes, there
had been fears that gifts to children would be subject to a different tax regime
from similar gifts to adults, the Chartered
Institute of Taxation
said in a statement.

According to the CIOT, HMRC have now confirmed that gifts to children will
not be taxed differently from gifts to adults. Provided the gift is outright and
not subject to any form of contingency or trust there is no tax payable if the
donor survives 7 years from the gift.

If the donor dies within 7 years there will still be a charge (as with
adults). There are no ongoing IHT charges, the CIOT explained.

Emma Chamberlain, chairman of CIOT’s capital taxes sub-committee, said: ‘HMRC
have given a clear response to the questions that have been raised and so those
who are happy to make outright gifts to children can do so without incurring any
additional IHT penalty.’

Further reading:

CIOT welcomes ‘late election’ on inheritance tax

CIOT looking to raise phone problems with HMRC

Related Articles

Supreme Court rules against Pimlico Plumbers in landmark employment case

Legal Supreme Court rules against Pimlico Plumbers in landmark employment case

1w Alia Shoaib, Reporter
Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

2m Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

3m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

5m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

6m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

7m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

8m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer