Government seeks views on inheritance tax changes for trusts
The government has opened a consultation on aspects of the application of the £1m allowance for property settled into trust qualifying for 100% agricultural property relief or business property relief. What is this looking at and how do you take part?
As announced at the 2024 Autumn Budget, a new £1m allowance will apply to the combined value of property that qualifies for 100% business property relief or agricultural property relief from inheritance tax. The value of the estate exceeding the allowance will be subject to relief at a lower rate of 50%. A consultation has now been launched which outlines how the £1m allowance will operate in respect of both existing trusts and trusts yet to be formed. As with any major change to the tax rules involving trusts, the transition is complicated, and the consultation asks whether the rules on application are sufficiently clear, as well as requesting views on other matters. Have your say here by 23 April 2025.
The consultation also revealed key information for individuals - it is confirmed that the £1m allowance refreshes every seven years (as the nil rate band does), and transfers made prior to 30 October 2024 (Budget Day) will not use up any of the £1m allowance.
Related Topics
-
Corporation tax return filing deadline
-
Don’t overlook the partial exemption annual adjustment
As VAT year ends approach for many businesses, HMRC’s guidance highlights the need to carry out the partial exemption annual adjustment. This is often overlooked but can have a direct impact on recoverable VAT. What do you need to check?
-
MONTHLY FOCUS: USING YOUR COMPANY TO DIVERT INCOME TO FAMILY MEMBERS
Operating a business through a limited company is less tax-efficient than it used to be. However, it can still be a very useful way of diverting income to other family members. In this Monthly Focus, we look at the methods, and associated considerations, involved in doing this.