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HMRC withdraws IHT disclosure obligation

Government concedes the original wording was too wide and would have caught ordinary tax payers

2 February 2016

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The treasury has bowed to criticism and will reconsider its proposed Disclosure of Tax Avoidance Schemes (DOTAS) 'hallmark', of forcing tax payers to disclose any inheritance tax (IHT) planning changes made to assets in order to gain 'a tax advantage'.

HMRC has said that respondents to its 2015 consultation pointed out that 'in this context, the straightforward removal of an asset from a person's estate by whatever means arguably constitutes a tax advantage because of the implications for IHT.'

The tax authority has conceded in its consultation response: 'The IHT hallmark received a significant number of comments with most suggesting that the hallmark is drafted too widely and would catch ordinary tax planning products.

'The government remains committed to updating the IHT provisions in DOTAS to ensure that the regime operates more effectively, but recognises concerns of respondents that the draft was drawn too widely. The government intends to publish a revised draft IHT hallmark in 2016 for further comment.'

However no major concerns were raised about applying the confidentiality and premium fee hallmarks to IHT, so will go ahead as planned with the original wording, HMRC also confirmed.


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Tax & Wealth structuring