The failure to increase the minimum reporting requirement for form IHT100, which deals with gifts made into trusts, has been branded a huge waste of taxpayers’ time.
Currently, if gifts of 10,000 or more are made into trusts, they must be declared on form IHT100.
Standard Life head of estate planning Julie Hutchison says HM Revenue & Customs indicated to the Association of British Insurers this summer that new regulation would be forthcoming in the autumn.
She says the industry had hoped for an increase in the minimum reporting requirement from 10,000 to 200,000 but the Chancellor has wasted an opportunity to reduce the regulatory burden.
She says: “The current paperwork is a waste of everybody’s time, both HMRC and the taxpayer. We need to get rid of unnecessary compliance which is creating headaches and additional costs in the advice process.”
The Government has said it hopes to save 400m by cutting its call centre costs by 25 per cent but Hutchison says these cost cuts will be counterproductive, with fewer civil servants to administer the forms and 12 pages of compliance on something that is not even taxable.
Worldwide Financial Planning IFA Nick McBreen says: “The sensible approach would have been to increase the limit on IHT100 and once again this is an example of the Chancellor being totally divorced from reality. The opportunity to make life simpler was wasted.”