It is expected that there could be some changes to simplify Inheritance Tax this year or next year. In November 2018, the Office of Tax Simplification (OTS) released their first report following a review of the current Inheritance Tax system. The Chancellor requested the review and the OTS provided recommendations to simplify Inheritance Tax from an administrative and technical standpoint.
The OTS recommended that “The government should implement a fully integrated digital system for Inheritance Tax.” We predict that the government will start to create a digital system this year but this will be a time-consuming task. It is probable that the government may first proceed with some of the other recommendations made by the OTS that will be quicker to implement.
These include simplifying the current Inheritance Tax forms, establishing a short form for the simplest estates, introducing an automated payment receipts system, and streamlining the probate and payment process with HM Courts and Tribunals Service. The current guide to completing an Inheritance Tax account runs to 92 pages.
It is also expected that the OTS is to release a second report covering wider areas of concern during 2019.
One little known fact is that you must pay any Inheritance Tax and interest that is due before you can get a grant of probate. However, you need the grant of probate to be able to gather in assets to the estate. So an executor may have to raise funds to pay the Inheritance Tax due on the deceased’s estate.
If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.