With a sense that inheritance tax (IHT) reform is overdue, combined with a need to raise funds to alleviate the costs of the pandemic, plans for significant changes to IHT could be fast tracked by HMRC.
A recent report from the Organisation for Economic Co-operation and Development (OECD) on inheritance taxation suggests radical changes to IHT could allow the Treasury to lessen wealth inequality while simultaneously increasing tax revenues.
What does the report suggest?
A key recommendation within the report includes the taxation on recipients rather than estates as a way to encourage wealth being gifted more widely and improving equality.
Furthermore, the current tax-free IHT allowance allows the very rich and those with easily transferrable assets to make substantial tax-free gifts over several years. A lifetime IHT allowance could be a solution to achieving a more equal system.
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