Report finds fresh thinking needed on inheritance tax

Posted 20/03/2012

A new survey of financial advisers has found there is a need for a new approach to be taken by the industry towards inheritance tax (IHT).According to research conducted by Octupus Investments, the use of discounted gift trusts (DGTs) appears to be on the slide, with reasons for the decline in the products including the fact they are deemed to come with too many drawbacks to be suitable for individuals in the UK.Paul Latham, managing director at Octopus, explained the company found a “widespread perception” that DGTs would not be useful for consumers trying to reduce the amount of money they have to pay through IHT.”Many of the advisers we spoke to told us DGTs are too complicated to set up, take too long to fall outside of IHT and most importantly, they are simply not flexible enough,” he said.Stephen Barratt, private client director for James Cowper, recently told FT Adviser that property investors will benefit from a new IHT ruling that sees holiday homeowners able to claim business property relief if they rent the properties out.Posted by Simon Crooks