New residence nil rate band is too complex

Changes to inheritance tax relief on residential properties are so complex that individuals affected will be unable to understand them according to the chair of the House of Commons Treasury select committee. Andrew Tyrie said there was a risk that those without professional support may take ill-informed decisions about when to sell their house or rewrite their wills.

Mr Tyrie was responding to the chancellor’s announcement in the summer budget and has published correspondence between him and George Osborne.

Mr Tyrie said: ‘Traps lie everywhere in the detail. Tax policy must be made more practicable and coherent. Tax needs to be fair. Every effort should be made to avoid measures which create the need for the employment of tax accountants and lawyers.’ He added that only professional advisers would be able to understand the changes.

The residence nil rate band will apply if property has been occupied as a...