Recent research commissioned by HMRC in relation to the motivations and attitudes of individuals when making decisions affecting their Inheritance Tax (IHT) has yielded some interesting results.
The HMRC research consisted of 80 telephone and face-to-face interviews with individuals and professionals.
The specific IHT focus was in the context of Agricultural Property Relief (APR) and Business Property Relief (BPR).
The research accepts that the statistical sample is small and is not necessarily representative of a wider and more diverse
The research found that, of the individuals interviewed, there was a limited understanding of the workings of IHT.
Only a few were aware of APR/BPR and how this would help their farms and businesses when planning for the next generation.
It was generally understood that those interviewed who had an awareness of APR and BPR felt that both reliefs were important in the context of supporting their existing farming and business activities.
Their main objectives were to keep assets in the family and avoiding the break-up of farms and businesses, as well as
providing a very tax-efficient way of moving assets around the family and down to the next generation.
The research found few examples of individuals buying additional assets with the sole focus of making use of the availability of APR/BPR.
Another, perhaps not unexpected, conclusion was that it was the professional community who sought to ensure that their clients made the best use of APR/BPR.
It might have been thought that such research would be a precursor to HMRC seeking to restrict APR and BPR but it would seem not… at least for the moment.
HMRC are very much focused on challenging the detail when individuals make claims for APR/BPR in whatever context, whether on death or lifetime succession planning.
Neil Irvine is a senior associate solicitor in the wills, trusts and probate team at Charles Lucas & Marshall (part of Coffin Mew
Solicitors) and can be contacted on (01635) 917480 or by email to email@example.com