Financial Matters – May 2019

Financial Matters – May 2019

This month’s technical bulletin covers new HMRC research into lifetime gifting. One of the most pertinent findings reported is that the overall knowledge of IHT rules and exemptions among those surveyed who had made gifts was just 25%. Gifts were generally being conducted to support family members as their lives moved through different phases. This highlights the need for greater awareness and advice in this area. It also provides useful ammunition for a proposed simplification to the lifetime gifting rules to a £10,000 single annual exemption for all lifetime gifts. 

It also looks at the impact of chargeable event gains on personal allowance. The bulletin details a recent tribunal where a Mrs Silver questioned HMRC’s interpretation of legislation relating to top-slicing relief on calculating income tax on a chargeable event gain. The Tribunal preferred Mrs Silver’s interpretation of the legislation, entitling her to a personal allowance which she may otherwise have been denied.  

Will HMRC request a change of law in order to provide more certainty? Anyone encashing bonds who may be affected by a loss or reduction of personal allowance should bear this Tribunal decision in mind!

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