Inheritance Tax 2019/20

Dave Wright, Tax and Accountancy Publisher

October 10, 2019

 The September Update for Inheritance Tax 2019/20 is now live for Subscribers to UK Tax.

The following paragraphs have been updated for this release:

1.1 Background – A note on the Office of Tax Simplification second report on simplifying the design of IHT, outlining some of the recommendations in the report.

1.13 Excluded property, reliefs etc. – Reference to a draft Finance Bill 2019-20 clause that provides for IHT relief in respect of Kindertransport Fund and Windrush Compensation Scheme payments.  

1.14 and 7.35 Settled excluded property – A note of the Finance Bill 2019-20 legislation on additions of assets by UK domiciled individuals to trusts made when they were non-UK domiciled, and also on additional excluded property tests for transfers between trusts.

3.9 Transferable nil rate band – Additional commentary regarding transferable nil rate band claims.

5.5 Payments and exclusions - Reference to draft Finance Bill 2019-20 provisions for IHT relief in respect of Kindertransport Fund and Windrush Compensation Scheme payments.

7.13 Gifts with reservation – Updated commentary on reversionary lease schemes following changes in HMRC guidance.

8.2 IHT421 -  Further amends made to IHT421.

8.3 IHT tool kit -  Updated in June2019.

8.36 Property in lieu -  Statistics for 2018/19.

8.39 Litigation decisions -  HMRC has published a list of litigation decisions in which tax avoidance  was a key player.

8.41 Offshore investigations -  Tax collected rises by 72% in 2018/19.

9.33 Settled excluded property – A note of the Finance Bill 2019-20 legislation on additions of assets by UK domiciled individuals to trusts made when they were non-UK domiciled, and also on additional excluded property tests for transfers between trusts.

10.33 Access to personal data - The recent case of Dawson-Damer v Taylor Wessing (2019 EWHC 1258 Ch) examines the right of the beneficiary to see personal data held on them by the trustees.

11.28 The draft Finance Bill 2019-2020 includes provisions that compensation payments received by Jewish individuals who came to the UK on the Kindertransport will not be subject to IHT.

12.13 The recent case of Smith v Stanley [2019] 2 WLUK 174 is another example where the Courts shown leniency. Here an appointment of a legacy fund was set aside for mistake, as the trustees were unaware of the tax consequences.

13.4 Listed exchanges – Additions to listed foreign exchanges.

15.38 HMRC revised its practice and it now is possible to claim the 36% reduced inheritance tax rate on assets offered to the nation in lieu to pay IHT for as long as the relevant component qualifies for the reduced rate.