Ian Smart: In tax we trust

HMRC consultation on trust taxation closes 28 Feb

clock • 3 min read

IHT rules for protection do not sit well with the principles of transparency, fairness and simplicity, says Royal London's product architect

The inheritance tax (IHT) system is complex with measures being added to combat evasion sometimes having what seem to be unintended consequences for situations where there was no real tax mischief. Take for example the case of pure protection plans being put in trust. Prior to 2006 the tax treatment of trusts was fairly simple and there was very little for the trustees to do until after a claim was paid. However since 2006, trustees have had to think about the tax consequences of the policy first being placed in trust, its value every 10 years and any exit charge consequences of paying m...

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