Normally governments are content with people dying first (once they are of no more use to the state), then extracting further "value" from the hapless corpse by taxing the corpse's estate.
However, the British government (because it is broke), has decided that death simply is not coming quickly enough; therefore it wants to extract its death tax before the taxpayer has died.
A brilliant wheeze by anyone's standards, and one that the government's minions in HMRC are keen to employ.
As such, HMRC are mulling proposals whereby it would be granted powers to subject people minimising inheritance tax to “accelerated payment” laws, meaning they would be forced to pay up front if HMRC suspect them of using new schemes to avoid tax.
As with all of our tax laws, the concept of "innocent until proven guilty" has been abandoned in favour of "guilty!".
The new rules will apply to trusts that HMRC believes are being used to avoid tax. However, as with all matters concerning HMRC, there is ample opportunity for HMRC to screw things up or for "mission creep" to occur over time as HMRC seeks to get its hands on ever more money earlier than it should.
When it comes to taxes never trust the words of the politicians, or that intentions of HMRC!
Tax does have to be taxing.
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If a trust scheme is used to minimise inheritance tax,, reduce the liability, protect the asset or investment or otherwise "avoid" paying the tax legitimately, then, unless it is contrary to the rules already extant at that point in time the imposition of accelerated payment rules is wrong, unless of course the same will apply to all avoidance schemes. Just see the big boys accepting that proposal?
ReplyDeleteYou're slipping back into bad habits again, Ken. :) Do you have a link to further info?
ReplyDeleteThanks,
Stew G
http://m.ft.com/cms/s/0/7945e486-1ef4-11e4-9d7d-00144feabdc0.html but as you are in the Treasury you know this already 😊
Delete