Inheritance tax labelled ‘unfair’ and ‘cruel’ by expert
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It means the Government will drop needless forms that people have to fill for smaller estates of up to around £1million. Treasury officials say this will positively affect 200,000 estates every year. More than 90 percent of non-tax-paying estates will no longer have to complete inheritance tax forms when probate or confirmation is required from January 1 next year.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “Limiting paperwork is long overdue, but inheritance tax remains deeply unfair and unpopular. There is nothing gloomier than taxing death. The best way to simplify the system would be to abolish this tax and show a more compassionate attitude towards the bereaved.”
There will also be a clampdown on people who falsely claim to let out their second property for holidays to pay less tax.
As part of the shake-up, the Treasury said that many second-home owners are liable to pay business rates rather than council tax if they declare they intend to let it within the next year.
However, business rates are often significantly less, and many of the properties are currently benefiting from the rates holiday for hospitality and retail properties. Of the more than 60,000 holiday lets currently eligible for rate relief, about 96 percent potentially qualify for small business rate relief and would therefore pay no rates at all until at least June.
The changes are part of an interim review into business rates and property taxes.
Jesse Norman, financial secretary to the Treasury, said: “We are making these announcements in order to increase the transparency, discipline and accessibility of tax policymaking.”
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