Chancellor responds to OTS report on inheritance tax
25 Mar 2021
Chancellor Rishi Sunak has responded to a report on inheritance tax (IHT) published by the Office of Tax Simplification (OTS).
The OTS report recommended that the government should implement a fully integrated digital system for IHT, ideally including the ability to complete and submit a probate application. The OTS also suggested that the government make changes to the current forms to reduce and simplify the administration of estates, including introducing a very short form for the simplest estates and updating the conditions that must be met to be able to complete a short IHT form.
A letter sent to the OTS on behalf of the Chancellor states that the government 'strongly supports' the key recommendations made in the report, and that it intends to:
- change reporting regulations so that from 1 January 2022 over 90% of non-taxpaying estates each year will no longer have to complete IHT forms for deaths when probate or confirmation is required; and
- make permanent the ability for those dealing with a trust or estate to provide an IHT return without requiring physical signatures from all others involved, easing the administration burden in cases where an IHT return is still required.
The government's full response can be found here.