In this time of increased uncertainty, there is an increased awareness around potential IHT exposures and an acceptance that big decisions around business succession and wealth transfers need to be made sooner rather than later.
As well as a shift in mindset, there is a recognition that changes to the current tax environment are inevitable. In the context of IHT specifically, January 2020 saw the release of a report advocating the "Reform of inheritance tax" by an All-Party Parliamentary Group which followed two Office of Tax Simplification reviews also recommending a number of changes to the existing IHT regime. July 2020 also saw the Institute for Fiscal Studies release an initial report entitled "Is it time for a UK wealth tax?" and the wealth tax debate seems one which is set to continue, both in the UK and internationally, for the foreseeable future.
Whilst there is speculation around potential changes to the existing IHT regime, the government have indicated that they do recognise the role that IHT BPR plays in enabling businesses to be passed on between generations without having to be broken up to pay IHT and that they consider this to be an important aim. Therefore, whilst there could be changes to IHT BPR, we do expect this relief will continue to have an important role to play in terms of business succession and wealth transition going forwards.
Associate Director, Tax
KPMG Crown Dependencies