Posted by James McNeile, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Tens of thousands of families will miss out on IHT reforms
The suggestion that plain “bad luck” will leave almost 30,000 families in the UK with substantial bills has led to renewed calls for the Government to immediately abolish Inheritance Tax (IHT).
The outcry has come following revelations about the unfortunate families who will miss out on changes because of the time it is taking for officials to implement the changes in relation to the “residence nil rate band”.
A total of 28,000 households who will pay the tax in the two year period from April 2015 will not be able to take advantage of new rules, which are designed to make the system fairer.
The iniquity of the transition from the old system to the new arrangements has led to growing criticism.
This week, Baroness Ros Altmann, until recently the Government’s Pensions Minister, said: “I’m all for a simpler and fairer tax system but the new Inheritance Tax rules seem to add new unfairness and complexity.
“Many families will end up paying significant sums in tax which would not be due if their loved one had just lived a little longer or in a different part of the country where house prices were lower.”
Jonathan Isaby, from the Taxpayers’ Alliance, said: “Inheritance Tax is a pernicious tax which hits families at the worst possible time.
“It’s one of the most hated taxes which raises very little revenue while adding a great deal of complexity to the tax code. Never mind raising the threshold, the Government should abolish the tax immediately.”
Treasury officials have argued that ultimately the reforms on the horizon will deliver improvements for families who had been dragged into IHT by rising house prices.
A spokesman said: “Under the new system, families will have a new £175,000 inheritance tax allowance for their home on top of the existing £325,000 threshold – allowing them to pass £1 million onto their children completely free of Inheritance Tax.”
The new rules are complicated and do not kick in until April 2017.