OTS calls for inheritance tax review

The Office of Tax Simplification (OTS) is calling for a "top-down" review of the entire inheritance tax system, noting that the current format may not be fit for purpose.

In a review of the UK tax system, it notes that the current framework for those writing a will could be out of date.

Tax reliefs are sometimes "complex", while some of the smaller tax reliefs have not changed for years, such as the exemption for monetary gifts on marriage which has not increased since 1975 and the annual exemption for gifts, which has been £3,000 for the last 30 years.

The OTS said "it would clearly be sensible" to increase these, noting that the annual exemption would now be almost £6,000.

In light of the Mirrlees Report, which described inheritance tax as "a somewhat half hearted tax, with many loopholes and opportunities for avoidance though careful organisation of affairs", the OTS said a "proper review" is required.

Find out more on how to reduce inheritance tax and plan your tax avoidance with Lawpack's expert guide 101 Ways to Pay Less Tax, written by an award-winning accountancy firm.

It comes as savings group NS&I reports that many people are failing to talk about writing a will with their parents.

Published on: March 8, 2011

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