How the DOTAS rules apply for inheritance tax

The disclosure of tax avoidance schemes (DOTAS) regime is intended to provide HMRC with early information about potential tax avoidance arrangements. This information allows HMRC to investigate potential tax loss more rapidly and where necessary to introduce suitable countermeasures. Practitioners who advise on inheritance tax (IHT) planning need to be aware of the rules and their potential application even in scenarios some may regard as very basic tax planning or ‘established practice’. This is particularly because the notification and disclosure timeframes are extremely short.

The DOTAS rules were introduced by FA 2004 Part 7 and have applied to IHT since 6 April 2011. The scope of these rules for IHT was significantly extended with effect from 1 April 2018 by the Inheritance Tax Avoidance Schemes (Prescribed Description of Arrangements) Regulations SI 1172/2017.

The DOTAS rules generally are concerned with ‘notifiable proposals and arrangements’...