The Law Society has published its response to HMRC’s June consultation on trust inheritance tax charges, Inheritance Tax: a fairer way of calculating trust charges, giving a qualified welcome to the proposed settlement nil-rate band.
However, it expressed disappointment that HMRC had not done away with charges for 18-25 trusts. It also drew attention to two “significant omissions”, namely the “three-month anomaly” and “the fact that trusts in which the settlor has reserved a benefit are taxed twice”.
It welcomed HMRC’s proposal not to introduce retrospective anti-fragmentation rules to old trusts, and to simplify the calculation of trust charges on old trusts.
It also recommended aligning the filing date with self-assessment by reconsidering the Finance Act 2014 changes.
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