"The Government should delay the introduction until 2018 so that this final consultation can be carefully considered as it is important the rules are fixed for the long-term"
On Friday HMRC announced a further round of consultation, but no delay to the effective date of the rules, which remains at 5 April 2017.
The announcement on Friday offered more details on the changes to the inheritance tax position in relation to UK residential property. These rules will effectively bring all UK residential property within the scope of IHT, irrespective of how the property is owned (for example through a company).
Nimesh Shah, Partner at Blick Rothenberg, said: “The new consultation will run until 20 October 2016, and whilst Friday’s announcements will largely be the final form, there are important points of detail to iron out. The draft legislation will not be in an actual workable form until towards the end of the year, possibly even the early part of 2017.
“The Government should delay the introduction until 2018 so that this final consultation can be carefully considered as it is important the rules are fixed for the long-term, especially after the almost annual tinkering to the rules since the last major reforms in 2008.”
Shah believes it’s "disappointing" that the Government has not offered any relaxation or transitional rules when extracting properties from companies.
He added: "Our expectation is that it was simply too difficult to offer a workable relief and so this has been shelved.
“In slightly more positive news, the consultation has offered some encouragement to non-domiciled individuals to remit monies to the UK, which will be helpful for inward cash flow into the UK economy.
“Overall, the consultation response was largely as expected but more time should have been offered to what has become a key component of the UK’s tax policy, especially given the EU referendum result.”
