Chancellor calls for Inheritance Tax simplification

The Chancellor Philip Hammond has requested a comprehensive review of the Inheritance Tax (IHT) regime, a letter has shown.

Mr Hammond wrote to the Office of Tax Simplification (OTS) late last month asking the Parliamentary office to carry out an assessment.

“I would be most interested to hear any proposals you may have for simplification, to ensure that the system is fit for purpose and makes the experience of those who interact with it as smooth as possible,” he said.

It is believed that the review will entail a focus on the technical and administrative issues within IHT, including the process of submitting returns and paying any tax due.

It will also involve practical issues around routine estate planning and disclosure.

The letter adds: “It could also look at how current gifts rules interact with the wider IHT system, and whether the current framework causes any distortions to taxpayers’ decision surrounding transfers, investments, and other relevant transactions”.

The total IHT take for the year ending May 2017 was a record-breaking £5.1 billion – a rise of nine per cent on the year previous.