TaxPersonal TaxIHT threshold on gifts to rise to £200,000

IHT threshold on gifts to rise to £200,000

New limit will reduce paperwork for the taxman

A circular sent by the Association of
British Insurers
to its 400 members last week has revealed that the
government is planning an increase in inheritance tax reporting limits on gifts
into trusts, raising the threshold from £10,000 to £200,000.

The Daily Telegraph reported that
the move is aimed at reducing paperwork for the taxman.

The circular says that HM Revenue &
Customs
plans to raise the limit in 2007-08, so that gifts into trusts would
only be reported when exceeding £200,000 in a single year, or £250,000 built up
over 10 years.

The new threshold will benefit tens of thousands of people after the
chancellor (in the last Budget) expanded the kinds of trust affected by
inheritance tax to include both interest-in-possession trusts (IIP) and
accumulation and maintenance (A&M) trusts.

IIP trusts are frequently used by parents to provide an income for children
without giving them access to the capital, while A&M trusts are often used
by grandparents for school-fees planning.

HMRC refused to confirm the increased reporting limits but admitted that the
levels were under review, The Telegraph reported.

Further reading:

Elderly sisters lose inheritance tax battle

Traveling TV show offers IHT advice

1 in 5 homes will be above IHT threshold

Related Articles

HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w 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

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

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

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor