DeVere Criticizes UK Death Tax Plans On The Living
Thursday, August 14, 2014
The founder of DeVere, a financial consultancy firm, Nigel Green has hit back at a proposal from HM Revenue and Customs (HMRC) to use its new accelerated payment powers to require payment of inheritance tax from living individuals.
that HMRC would force people to temporarily pay their inheritance tax
upfront if the person enters into a tax avoidance scheme that falls under the remit of HMRC's Disclosure of Tax Avoidance Schemes (DOTAS) regime. He complained
that the proposal would brand taxpayers "guilty until proven
innocent," and he warned that "that those who are taking perfectly
legal, and indeed sensible, measures in order to mitigate their
inheritance tax burden will be unintentionally, yet adversely affected
should this come into effect."
Inheritance tax was brought into
DOTAS from the 2011-2012 tax year, to detect a specific type of
avoidance involving the use of trusts. HMRC plans to expand the coverage of DOTAS, and consequently the scope of its advance payment powers, to schemes entered into during a person's
lifetime that are designed to reduce the value of their estate, or
arrangements that seek to avoid inheritance tax on lifetime transfers
or charges other than "entry charges" on relevant property trusts.
HMRC says that its proposal to expand DOTAS into these areas does not mean that the straightforward use of inheritance tax reliefs and exemptions would be affected. Accelerated payment notices would apply
where a chargeable event has occurred in relation to a scheme
disclosed under DOTAS. Notices would not be issued
In May, a DeVere Group poll revealed that reducing inheritance tax
liabilities is now the number one long-term financial priority of
nearly half of those with UK homes. Green said that the tax was intended
to be paid by the super rich, but that rising house prices mean that "millions
more will be pulled into the IHT trap."
Green also described inheritance tax as one of the most unpopular
taxes, and as "a form of double taxation" on assets
that had already been paid for. He said: "Most people would prefer
to leave their legacy to their heirs than to the tax authority."
Green's comments are in response to the publication of a HMRC consultation Strengthening the Tax Avoidance Disclosure Regimes on July 31, 2014.