HM Revenue and Customs HMRC is considering how to simplify the way in which inheritance tax issues are reported for certain trusts. Following the changes made in the Budget of 2006, regarding inheritance tax treatment of gifts to trusts, more people are finding that they have to complete a report declaring their gift to a trust, even when there is no inheritance tax due.
Following the changes in March 2006, IHT 100 forms needed to be completed for gifts of more than £10,000, and there maybe a requirement for the IHT 100 forms to be completed at the ten-year anniversary. HM Revenue and Customs HMRC have indicated that they have looked at the rules for these trusts and believe that they can be changed to reduce the number of reports people are required to complete.
Our view
This is a totally unsatisfactory for taxpayers and HMRC. If reporting is required, a simple, single line form should be used. This is all to do with Inheritance tax and chargeable lifetime gifts. We bet you did not know that Inheritance tax is not a death tax but it is really a life tax as well. In this age of computers, it is not rocket science for HMRC to keep a record of cumulative gives you have made in the last years.