Please note: The following services will be unavailable from 00:00 Saturday 21st September until 09:00 Sunday 22nd September 2019 – MyAccess, Connect Onshore, Connect Offshore, and Class.
The following services are unaffected and will run as usual: Home Finance, Individual Protection & The Retirement Account Dashboard.

More Customer News


IHT reform – The OTS’s latest report on simplifying IHT is worthy but there’s a missed opportunity

The Office of Tax Simplification has just released its second report into the design of inheritance tax.

Commenting, Neil Jones, Wealth and tax specialist, Canada Life, said:

“There are both welcome recommendations and missed opportunities here.

“This is a more substantial package of recommendations than we saw in the first review which, if adopted, would lead to significant changes to the way IHT works.

“While still not a root and branch review of IHT, it does seek to deal with major areas of confusion and, in some cases, injustice, and we’d urge the Government to implement some of these ideas.

“The rules around gifting are ripe for review. One recommendation is to cut the 7 year rule down to 5, so if you gift after five years it can effectively be done outside of IHT. This would obviously help more clients. It’s also proposed to remove the ’14 year rule’ entirely, meaning there would be no need to take into account gifts made outside of the existing 7 year period.

“Getting rid of taper relief will be welcomed by many, as it’s extremely confusing even for many professionals.

“While tough for clients, removing the capital gains uplift will make it a more even playing field when it comes to other assets.

“One recommendation in particular will make life easier for clients – removing the need to put life insurance policies in trust to avoid IHT. If implemented, there would be no need to create and therefore register a trust, which removes the possibility of unfair IHT charges during the life of the trust as there isn’t one.  

“There’s also a big missed opportunity. The report basically says it’s too early to look at the residence nil rate band – many advisers will see this as a mistake, as this area is both extremely complicated and often unfair in its application.”

Categories

All News

Search Our News Archive

Archive

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.