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Inheritance tax 'needs to be simplified'



24 November 2008

The current inheritance tax system needs to be "much simpler", one expert claims.

According to Kathryn Cooper, editor of the Times' money section, people who are heavily taxed are likely to use complex structures to try to avoid it.

Writing for the paper, she questions: "They have worked hard and paid tax on their income and most of their savings, so why shouldn't they pass on those assets free from death duties?"

Ms Cooper believes it is necessary to scrap "exotic reliefs" and replace them with greater exemption from inheritance tax.

She adds that the current system means that the exceptionally rich are able to give away their assets in order to escape tax, whereas middle class people live off the money.

The expert concludes that anyone rich enough to be above the current threshold are likely to be able to "give their money away anyway".

Married couples can currently transfer £312,000 inheritance tax nil-rate bands, which are doubled on the death of the second spouse.

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