HMRC plans IHT avoidance crackdown
HMRC is planning a crackdown on a new type of tax avoidance scheme involving inheritance tax.
The Revenue wants to close loopholes that allow some tax avoidance to escape detection, amid signs that more scheme promoters are focusing on inheritance tax, the Financial Times reported.
“There is a risk that IHT attracts those who wish to abuse the tax system by engaging in tax avoidance activity,” HMRC said.
HMRC said it wanted to catch some inheritance tax schemes started during a person’s lifetime that are designed to reduce the value of their estate.
In some cases HMRC will be able to use the new law on “accelerated payments” requiring tens of thousands of investors in schemes to tax up front.
HMRC said it had received information that some promoters were planning to shield clients from the demands by ceasing to disclose tax avoidance schemes, the FT reported.
David Gauke, financial secretary to the Treasury said it was vital that the rules on disclosure of tax avoidance schemes, introduced in 2004, kept pace with the accelerated payments measure and the “ever-evolving avoidance market”.