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| Pre-owned assets regulations published |
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Regulations come into force on 14 November 2007, which set out how an election for the inheritance tax (IHT) treatment of pre-owned assets should be made.
Finance Act 2004, Schedule 15, provides for income tax to be charged on the benefit people gain, in certain circumstances, from the continuing enjoyment of assets they formerly owned (known as "pre-owned assets"). As an alternative to the income tax charge, Schedule 15 also provides that the former owner may elect that the assets in question will be treated as part of their estate for IHT purposes. The income tax charge came into effect on 6 April 2005 and was intended to counter IHT avoidance schemes by which people circumvented the IHT “gift with reservation” rules by removing assets from their taxable estates while continuing to enjoy them. Schedule 15 provides that an election for the IHT treatment to apply must be made "in the manner prescribed". The Income Tax (Benefits Received by Former Owner of Property) (Election for Inheritance Tax Treatment Regulations 2007 (SI 2007/3000), which come into force on 14 November 2007, provide that such elections should be made in writing on form IHT 500. HMRC have been providing the form IHT 500 for people to use to make an election since April 2005. In respect of elections made in the period between 6 April 2005 and the coming into force of SI 2007/3000, HMRC will continue to treat all timely elections providing all necessary information (whether or not made on form IHT 500) as validly made, notwithstanding that a form had not been prescribed by regulations at that time. However, from the coming into force of these new Regulations, HMRC will only consider elections made on IHT 500 to be validly made. Link
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Wednesday, 24 October 2007 | 2247 Hits |
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