Round 1 / 4 of estates that pay inheritance tax
(IHT) are being investigated by HM Income & Customs, highlighting the
complexity of the system, based on Quilter.
A freedom of data request by the monetary
planning agency revealed greater than 5,000 IHT investigations are opened by HMRC
In 2018/19, round 22,000 estates have been accountable for IHT.
The variety of IHT investigations has grown by round 7.eight%
following the introduction of the Residence Nil Fee Band (RNRB) in April 2017.
Gordon Andrews, tax and monetary planning knowledgeable at
Quilter, stated given the present complexity of the IHT system it’s no shock
if issues go awry.
“As an example, below the present guidelines, if a pension
switch is made whereas somebody is in ill-health then there’s a threat that HMRC
will problem the IHT-free standing of the loss of life advantages if the particular person passes
away inside two years of the switch. That is absurd at one of the best and perverse
at worst as it’s basically penalising folks for applicable tax planning,”
Andrew said that getting monetary recommendation is essential to
mitigate the possibilities of an investigation.
“It’s additionally very important to decide on the appropriate executor as a result of the
onus is on them if there’s an investigation,” he added.