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Press comment: Government launches inheritance tax review

30/01/2018

If you are covering the Chancellor’s letter to the Office of Tax Simplification asking for a review of inheritance tax, please find comment from Rachael Griffin, tax expert at Old Mutual Wealth:

Rachael Griffin“The Office of Tax Simplification pointed to inheritance tax as an area ripe for reform in its plans for the year ahead and with the weight of the Chancellor behind it, the OTS has a golden opportunity to simplify this complex area of taxation. 

“The inheritance tax system is not straightforward and has a number of legacy clauses and exemptions that the government could seek to reform.  One of the best examples of over-complication in death taxes is the residence nil rate band (RNRB), which is incredibly complicated and causes a lot of confusion. Our research revealed that 70 percent of people have no idea how the RNRB works. An easier method to achieve the same goal would be to simply raise the standard nil rate band amount to £1 million.

“The overall policy direction has shifted in recent years towards allowing people to pass on more of their wealth on death, however many people would like to help their families while they are still alive. The annual gifting allowance is easily understood and has remained at just £3,000 since 1981. If it had increased in line with inflation it would now be worth £10,000. Increasing longevity means that men aged 65 will live to 87 and women until 89 so their children will often have to wait till their 50s and 60s before they receive the money which is not when they need help the most.

“For individuals and families that are thinking about estate planning, it is important for them to keep an eye on whether inheritance tax rules do change and make sure they take advice from a professional financial planner to ensure they are making the right arrangements in order to pass on assets to their family tax efficiently.

 “An HMRC report published alongside the previous budget shows very few people properly understand the reliefs and exemption available, so it is crucial to take professional advice. A professional financial planner can help families and individuals ensure they are passing on assets to their family tax efficiently.”

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145 076tim.skelton-smith@omwealth.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £114.9 billion in investments (as at 31 March 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

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