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HMRC have published a document summarising the responses to the July 2010 consultation on bringing inheritance tax on transfers of property into trust within the disclosure of tax avoidance schemes (DOTAS) regime.
As a result of the consultation, the department will publish a list of known schemes and arrangements that will not require disclosure as they are covered by the grandfathering rule in regulation 2 of the Description Regulations.
The aim is to reduce the administrative burden for both practitioners and HMRC by preventing unnecessary disclosures.
The following changes are also to be made.
First, HMRC will adapt the IHT account (form IHT100) to allow a scheme user, who has been issued with a scheme reference number (SRN), to use the form to notify that number and avoid the need for a separate notification on form AAG4. This would require a change to the draft information regulations.
Notification by means of form IHT100 would apply where the scheme user has to submit an IHT account under IHTA 1984, s 216 and the transfer of value coincides with the first step or element of the scheme.
Second, claims to relief, where there are no further steps or elements, do not have to be disclosed on account of the grandfathering rule. HMRC now consider it is not necessary for any reliefs to be specifically exempted.
Finally, there will be a minor amendment to the draft regulations to extend the grandfathering rule to take account of schemes that have already been implemented but not ‘made available’.
HMRC expect to have the regulations taking into account the changes laid by the end of January 2011, so that they can take effect on 6 April.
