The government has announced that it has temporarily shelved its plans to extend the Disclosure of Tax Avoidance Schemes (DOTAS) regulations to cover almost all types of IHT planning following criticisms of the proposals put forward by professionals.
The DOTAS regulations apply to many taxes but the proposal that they should extend to IHT planning measures were widely criticised when they were announced. The object of the DOTAS rules are to ensure that HMRC are given advance warning of tax planning schemes so that they can consider how best to limit their effectiveness or to judge in advance whether they are abusive.
The original proposals were very broad and could be construed as covering any form of IHT planning other than making a Will which was specifically excluded. The proposed rules would for example have included many lifetime gifts to family members.
In the light of the criticisms, many of which HMRC appear to have accepted, HMRC has withdrawn its proposals but it is understood that the government proposes to develop and issue revised draft regulations to bring IHT planning under the DOTAS umbrella for further consultation later in the year.
Ian Newcombe is a partner and leads the private client team in Exeter. If you would like to discuss Wills inheritance tax please do not hesitate to contact Ian on 01392 210700 or email email@example.com.