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HMRC denies inheritance tax claims

HM Revenue & Customs has denied suggestions it could collect standard inheritance tax (IHT) before people die.

There had been speculation that measures put out for consultation could mean HMRC demanding "accelerated payment" of IHT from living individuals who were using avoidance schemes.

But an HMRC spokesman said tonight: "The Government is not making any changes to the collection mechanism for inheritance tax, which is payable after death.

"In no circumstances is the Government seeking payment of these charges during the taxpayer's lifetime.

"The only IHT charges currently payable before death relate to trusts. This is an established feature of the IHT and trusts regime and is not changing.

"The proposals would only affect a small minority of wealthy individuals actively seeking to avoid inheritance tax through the use of an avoidance scheme that has been disclosed under DOTAS. Even then, if the avoidance relates to IHT on an estate at death, it will only come into effect after death.

"Under inheritance tax rules a couple do not pay tax on the first £650,000 of their estate on death."

Inheritance tax is levied at a rate of 40% on the value of an estate above the £325,000 threshold - with married couples able effectively to combine their allowances.

The Tories pledged to raise the threshold from £325,000 to £1 million at the last election, but the policy was blocked by the Liberal Democrats.


From Belfast Telegraph