8th December 2015
A Conservative MP and chair of an influential body of MPs has called for the Chancellor to simply inheritance tax changes, describing them as “messy” and “complex”.
Andrew Tyrie, chairman of the Treasury Select Committee, has written to George Osborne urging him over the Budget proposals to increase the threshold for inheritance tax from £325,000 to £500,000 per person for home owners who pass on their main residence to their children.
For married couples, the new rules will raise their joint threshold to £1m.
But Tyrie argues that a clause allowing owners to downsize in old age and keep some of the proceeds for their children is overly complex.
The measure was designed to ensure that pensioners do not remain in large family homes that they do not need for the sake of paying less tax.
Tyrie has also called for the Chancellor to clarify the rules quickly to give people writing their wills now more clarity over how much tax their estate will pay when they die, as changes are not yet finalised and are only likely to apply to homes inherited from April 2017 onwards.
Tyrie says: “The Chancellor should think again about these proposals. They are a mess of complexity and uncertainty. And they almost certainly don’t need to be, in order to achieve the government’s objectives.
“The further policymakers lose sight of simplicity, the more taxpayers are forced to spend money on the only people capable of making sense of their affairs – tax accountants and lawyers. The danger must be that rules this complex will make tax accountants and lawyers the main beneficiaries.”