Inheritance tax laws have come under mass criticism following the recent news that Prime Minister David Cameron received a £200,000 ‘gift’ from his late mother in 2011.
Some critics have called for a scrapping of the whole system altogether, with senior figures from the conservative party labelling the so-called ‘death tax’ setup as ‘grossly unfair’ and ‘flawed’.
Director of the Institute for Fiscal Studies, Paul Johnson also urged that the ‘incredibly unpopular’ tax should be thrown out – due to the ‘unfair’ impact the tax has on middle-earners.
“One of the reasons it seems unfair is precisely because only the really pretty wealthy can pass on significant sums during life that don’t attract inheritance tax,” he said.
Cameron’s £200,000 gift has been criticised as a ‘tax dodge’ by numerous senior officials, but HM Revenue & Customs (HMRC) say that making lifetime ‘gifts’ is within British legislation and does not qualify as tax avoidance.
In fact, the UK’s non-Governmental Money Advice Services advises: “If there will be inheritance tax to pay once you’re gone, then a good way to cut the taxman’s take is to make the most of gifts and transfers.”
HMRC loosely defines tax avoidance as “bending the rules of the tax system to gain a tax advantage that parliament never intended”.
Carter Lemon Camerons LLP Solicitors is a City law firm which provides inheritance tax planning services with a personal touch to its clients. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. If you require advice on inheritance tax planning, please contact Ian West, Michael Woodward or Katie Ward or telephone: 020 7406 1000.