The HM Revenue and Customs has confirmed that it intends to increase the limit which chargeable lifetime trusts should be reported. They are increasing the limit from £10,000 to £200,000 for chargeable lifetime trusts made in one year and the ten-year chargeable lifetime trusts will increase from £40,000 to £250,000.
These changes will be implemented in the 2007/2008 tax year.
Our view
We welcome the changes, but think that the changes should have been made earlier. The changes will mean that the amount of administration paperwork for smaller chargeable trusts is reduced. However, some people who have delayed reporting transfers, expecting the changes to have been backdated to 2005 will still have to report.