Could these new reforms help simplify the inherently complex system for taxing both lifetime gifts and trusts and death estates?
The report is also looking into inheritance tax reliefs and exemptions together with the seven-year gifting rule and considering whether these should be abolished.
Lifetime gifts under the current system can be an attractive way of reducing the value of a death estate and passing wealth down to the next generation. The APPG report is contemplating whether lifetime gifts under £30,000 should be tax-free with an immediate tax charge of 10% on gifts over that threshold.
These reforms are large scale and highlight the complications surrounding the current inheritance tax legislation.
The All-Party Parliamentary Group for Inheritance & Intergenerational Fairness (APPG IIF) has published a report recommending the abolition of inheritance tax (IHT) in its current form, replacing it with an entirely different regime.