LEADING tax lawyers have
launched a stinging rebuttal
of the Government’s claims
that its crackdown on
inheritance tax will affect
only a tiny number of
families. They claim that
“virtually every will in the
country” will have to be
rewritten.
The tax experts have
written to The Times
to defend the paper’s report
that the Government’s move,
announced in last week’s
Budget, would hit at least
100,000 families. The report
was challenged by Dawn
Primarolo, the Paymaster
General, who insists that
the numbers affected “make
up only a tiny fraction of
the wealthiest top 1 per
cent of the population”.
The new rules apply to
accumulation and maintenance
trusts set up by parents who
wish to pass on assets free
of tax while preventing them
from being squandered.
Typically, the trusts allow
children to draw an income
from an asset until they
reach 25, when they acquire
the capital.
The Government claims
that the schemes are used
illegitimately to avoid
paying inheritance tax, and
denies that by taking action
against the trusts it will
cause wide disruption.
Edward Nugee, QC, head of
Wilberforce Chambers, said
that solicitors routinely
advise the use of the trusts
in wills. The budget change
would force parents to
rewrite their wills so that
their estates were handed
over when the children were
only 18, he said. “A lot of
people have been exploding
about this. It has been
introduced without
consultation and without
warning. It’s contrary to
everything that has been
done since the year dot.”
