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IMPORTANT INFORMATION
Press releases are intended for information only and should not be relied upon by customers when making investment decisions. While all efforts are made to ensure that the content of press releases are accurate at the time of publication, the information contained within past press releases should not be relied upon as still being current.
10.03.2008
Standard Life welcomes 30-fold increase to IHT reporting limit
Standard Life has welcomed the publication of new IHT regulations which will greatly simplify the compliance and reporting involved for many lifetime gifts. The new rules were issued on 6 March 2008 and will come into force on 6 April 2008, with an effective start date of 6 April 2007.
Commenting on the new regulations, Julie Hutchison, Estate Planning Specialist with UK Financial Services, Standard Life said : “I am delighted with the retrospectivity in these new rules, which means people who have made gifts since 6 April 2007 will be able to take advantage of these new limits. These long-awaited regulations are the product of two rounds of consultation and are better as a result of that process. They are simpler and more consumer-friendly than the first draft from summer 2007.”
Under the old rules, chargeable transfers of over £10,000 had to be reported to HM Revenue & Customs (HMRC) on forms IHT100 and IHT100a, together adding up to 12 pages of compliance even if no tax was due. In the aftermath of Budget 2006, more types of lifetime gift qualified as a chargeable transfer instead of a PET (potentially exempt transfer) which meant both HMRC and those making gifts faced additional administrative burdens even when no IHT was due.
The new rules create 2 tests : if the gift is of cash or quoted shares, the reporting limit is the IHT threshold (ie. £300,000 for the current tax year). If however the gift is another type of asset, for example an investment bond, the reporting limit is 80% of the IHT threshold (ie. £240,000). Commenting on the levels selected in these new regulations, Julie continued : “Since Standard Life’s Discounted Gift Trust involves a gift of cash, people will benefit from the higher threshold test. I am also delighted to see the reporting threshold pegged to the nil rate band for IHT, which means the limit will automatically increase each year instead of being stuck at a fixed figure for years, which was the problem with the old rules.”
Tax and legislation are liable to change. The information provided here is based on Standard Life’s understanding of law and HM Revenue & Customs practice at the date of publication.
Ends
Media enquiries please contact:
Yvonne Savage, Senior Media Affairs Manager
UK Financial Services, Standard Life
Direct: 0131 245 0476
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Email: yvonne_savage@standardlife.com
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UK Financial Services, Standard Life
Direct: 0131 245 6087
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Email: lesley_f_davidson@standardlife.com
Notes to Editors
- Standard Life Assurance Limited is recognised for the high quality of its customer service, in particular for providing a service that is consistent, reliable and responsive. Standard Life received recognition for this in 2007 when the company were voted a 5 star provider at the Financial Adviser Service Awards for the 12th year running. As a leading pension provider in the UK, Standard Life Assurance Limited was voted the Best Pension Provider at the Money Marketing Awards for the last 5 years in a row. Standard Life has been voted Money Marketing Company of the Year in nine of the last ten years.
- Standard Life has approximately 7 million customers worldwide and provides an extensive range of products and services, aimed at meeting the financial requirements of customers throughout their lives.
- The first consultation was in July 2007 and the second in February 2008. Standard Life gave feedback on the drafts on both occasions.
- The draft regulations can be found on HMRC’s website at http://www.hmrc.gov.uk/si/20080605.pdf
