Changes to inheritance tax and capital gains tax on hold (for now)

11 January 2022
1 min read
Published:

Michael Lansdell explains Tax Administration Maintenance days, and explores the 2021 reviews of inheritance tax and capital gains tax.

It’s no secret that the UK government wants to bring the tax system up-to-date and simplify it too and, with this in mind, last year saw the first Tax Administration Maintenance days (TAMDs), in March and then in November. The TAMDs were introduced by the Treasury in an attempt to move away from an all-in-one budget. They are days when documents will be published relating to consultations for announcements made at the budget/spending review, also summaries to responses to prior consultations and technical information notes.

Of particular interest on the TAMDs 2021 were the responses to the Office of Tax Simplification’s (OTS) reviews of inheritance tax (IHT) and capital gains tax (CGT).

Inheritance tax
The government decided not proceed with any changes to IHT. This is despite the OTS recommendations about reliefs and exemptions, which can be complicated. The nil rate band and residence nil rate band are both frozen until 2025/26, which likely guided the decision to take no action. Reduced IHT reporting requirements from January had already been announced.

Capital gains tax
The OTS also reviewed CGT, and made far more wide-ranging suggestions but, as with IHT, any changes were put on hold, for now. The government had already extended the time limit for reporting and paying CGT for residential property disposals to 60 days (it was previously 30). It will also proceed with a single customer account for the different ways of reporting and paying CGT and with relaxing the rollover relief conditions, where land and buildings are acquired under a compulsory purchase order. Also, it intends to go ahead with extending the no gain/no loss window in the scenario of a separation or divorce. The government also said it will review the rules for enterprise investment schemes and principal residence relief nominations – what will change, aside from procedure, remains unclear, however.

So, no fundamental change on the immediate agenda, but the door is not closed. Watch this space and keep checking our blog for any measures that could impact on both your personal and business tax planning in the future.

For help with business or personal tax planning, call Figurit (formerly known as Lansdell & Rose) on 020 7376 933.