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HMRC have issued a consultation document to look at options for simplifying the calculation of inheritance tax (IHT) charges to which trusts are subjected at ten-yearly intervals and when property is withdrawn from trust.
The aim is to retain a regime that charges IHT on assets held within trusts, but to make the process less burdensome for both taxpayers and the taxman.
For some smaller trusts, the professional costs involved in collecting the information necessary to undertake the tax calculations can often be disproportionately large compared to the tax at stake, as can the process of undertaking the calculations themselves and making a return.
And the outlay of performing and checking the computations is not always cost-effective for the Revenue.
Views are sought on how encumbrances could be reduced and whether the calculation of charges can be made easier without jeopardising tax revenues. Responses should be sent no later than 5 October.
