Inheritance tax scheme disclosures
The Government is planning to extend the Disclosure of Tax Avoidance Schemes (DOTAS) regime to cover inheritance tax (IHT) related planning.
A new consultation document has been issued specifically in relation to extending the DOTAS to include IHT as it applies to the transfer of property into trust.
HM Treasury and HMRC are aware that tax avoidance schemes are being used to avoid the IHT charge that arises when property is transferred into trust. FA 2010 included legislation to close down two such specific schemes. The concern, however, is that the full extent of such activity in this area is not known. And the time lag between the implementation of schemes and a liability to tax arising means it can be many years before schemes become known to HMRC.
The consultation is open for comments until the 20 October 2010 and HMRC have specifically requested comments from interested parties on the:
- Description of the schemes that would have to be notified
- The administrative arrangements for providing the notification
- The Impact Assessment annexe included within the consultation document