SFS warns of perils of non bonafide IHT planning
The extra time HMRC will have to investigate makes it even more essential that people use bonafide IHT schemes to gift assets away, rather than risk being caught out at a later date.
Previously HM Revenue & Customs only had 60 days in which to do this, yet now the department wants to crosscheck a person's estate against their banking records and annual tax returns, to ensure that assets have not been given away in the seven years preceding that person's death. This move will affect those estates under the IHT threshold of £312,000 and those up to £624,000 - where a couple has claimed the unused IHT allowance from a dead spouse - meaning families could face more stringent investigations.
Matthew Cox of Skipton Financial Services commented, "Potentially now HM Revenue & Customs could now take as long as they want before clarifying what inheritance tax is payable, leaving families in limbo over what they owe. This change makes it even more vital for people to keep full financial records. We would urge anyone thinking they can secretly gift assets out of their estate and get away with it, to think again. We urge people to use established IHT schemes for disposal of assets and always seek professional advice on inheritance tax planning as early as possible."