| HM Revenue & Customs (HMRC)
has launched a consultation into tackling
inheritance tax avoidance associated with
trusts. The consultation, which
continues until 20 October, is inviting
comment on extending the Disclosure of Tax
Avoidance Schemes (DOTAS) regime to the
transfer of property into trust.
The DOTAS regime was introduced in 2004
and currently applies to income tax,
corporation tax, capital gains tax, stamp
duty land tax and national insurance
contributions. It is designed to give HMRC
early warning of the detail of tax
avoidance schemes and identify users of
such schemes.
The Finance Act 2010 contained
legislation to close down two schemes to
avoid inheritance tax when property is
transferred into a trust but concern
remains that the full extent of such
activity is not known.
The consultation document says that
including inheritance tax in DOTAS should
help to identify schemes and users at an
early stage, helping HMRC to target
anti-avoidance measures effectively.
LINKS:
IHT consultation
Meanwhile, HM Revenue & Customs (HMRC)
has clarified the position on the
valuation of wine cellars for inheritance
tax (IHT) purposes.
The August issue of the HMTC Trust and
Estates newsletter says that “information
in the public domain” indicates that wine
cellars are valued at the purchase price
rather than the value at the date of death
for IHT.
But it says that Section 160 of the
Inheritance Tax Act clearly states that
the value of any property for IHT purposes
is “the price it might reasonably be
expected to fetch if sold on the open
market at that time”.
It adds: “Therefore it is clear that a
wine cellar must be valued at its open
market value for Inheritance Tax purposes
at the time of the relevant occasion of
charge.”
LINKS:
Inheritance Tax and Trust Newsletters
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