How will inheritance tax change following the Autumn Statement?
Legislation will be introduced to extend the period of freezing the nil rate band at £325,000 until 2017-18.
Periodic charges on discretionary trusts. Legislation will be introduced to align the filing and payment dates for trusts. Currently the account must be delivered within 12 months after a chargeable event, but the tax is payable at a date that varies with whether the event took place before 1 October or after 30 September – normally about six months after the event.
This change will put what is normal practice into statute and will mean that both the account and tax payment will be aligned at six months after the end of the month in which the chargeable event took place. This will have effect from 6 April 2014.
Income that has remained undistributed more than five years before the ten-year charge will be deemed to be capital for the calculation of the periodic charge. This will take affect from 6 April 2014.
This will not apply to excluded property (income arising from property situated offshore by a non-UK domiciled settlor). Neither does it apply to income from government securities or foreign-owned works of art that are in the UK for display. This change also takes effect from 6 April 2014.
Article contributed by ACCA