Inheritance Tax Crackdown

Revenue and Customs inspectors are planning a crackdown on people who give gifts, especially of property, several years before they die. This is seen to amount to tax evasion.



It would be expected that anyone giving a home as a gift and still continuing to live in the property would be expected to pay rent on the property. Tax would then be claimed from the rent receiver. They now intend to ask more questions to gain further information on assets given as gifts. Anyone found to have with =-held information may be subjected to a fine.

The number of people having to pay inheritance tax has soared by 72% since 1997. The tax is paid on assets over £300,000 but this is only £30,000 away from the average house price. Although the threshold is set to rise to £312,000 in 2008 and to £325,000 in 2009-10 the government are under pressure to raise this to £500,000.