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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If you have any questions around this article, or require any assistance with inheritance tax or related issues, contact our Private Client Services’ team on 01788 539000 or 0116 261 0061.


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