Reform IHT to pay for the cost of COVID-19, say inheritance planning professionals

[THE Chancellor of the Exchequer should scrap inheritance tax and replace it with a radical new alternative to raise more revenue and help pay for the cost of COVID-19 support measures. That is the conclusion of a survey of 500 professionals who advise families on inheritance planning, published on 17 March. Those surveyed included solicitors, tax advisors, financial planners and accountants.

Over half (57%) of the professionals who took part in the survey by the Society of Trust and Estate Practitioners (STEP) support proposals by MPs for the current IHT regime to be replaced with a simpler flat rate, with far fewer reliefs and exemptions. That would greatly simplify the system, reduce avoidance and increase fairness for families. The respondents represent clients from all levels of the wealth scale, including middle-income families whose home is their main asset and therefore are affected particularly adversely by IHT.

Overhauling IHT is more popular as a revenue raiser than either a one-off wealth tax or an annual wealth tax, with 36.2% of respondents favouring the IHT route while the other options are preferred by 29.04% and 12.88% respectively.

A report last year from the All-Party Parliamentary Group (APPG) for Inheritance and Intergenerational Fairness called for the introduction of a ‘flat-rate gift tax’ to sweep aside the current IHT system’s Byzantine array of reliefs and exemptions. The proposals would tax all lifetime and death transfers of wealth, with very few reliefs and a low flat rate of 10%, as opposed to the current rate of 40%. Rates would reach a maximum of 20% on estates of over £2m. The STEP survey found that 65% of inheritance advisors agree with the APPG recommendation of a 10% flat rate as the best way to simplify the IHT system and discourage avoidance by wealthier families. Just under half agreed that £2m is an appropriate threshold for estates to pay the higher rate, while 28% think it should be higher and 7.6% think it should be lower.

Emily Deane, technical counsel at STEP, commented: “The current IHT system is complex, ineffective and unfair. A new system, like the one recommended by the APPG, is the preferred route the Chancellor should take to raise funds to pay for the cost of COVID-19 support and sort out an unjust tax.

“A broadly-based, low-rate tax with few reliefs and exemptions is far preferable than a tax with a high headline rate that the well-advised can avoid by use of complex reliefs and exemptions. The flat rate proposed by the APPG would apply across the board and lead to less avoidance, while keeping the UK attractive for wealthier individuals.”

John Stevenson MP, chair of the APPG for Inheritance and Intergenerational Fairness, said: “Our report in 2020 concluded that fundamental reform of IHT is badly needed. Reform would simplify the system, reduce red tape, be fairer and is likely to provide extra tax revenue. We call on the Chancellor to look at fundamental reform of this unpopular tax.” q

Concern for working horses’ welfare leads to charity’s campaigning role

[THE HORSE RESCUE FUND was founded at a time when many deliveries were still being carried out using horses – which at that time were destined for a bleak fate after they finished their working life.

That history explains why, as well as rescuing horses, ponies and donkeys in desperate need, the fund has campaigned for improvements at horse sales, in transit and for equine welfare generally. Indeed, they often work in conjunction with their fellow organisations on some of the largest equine welfare cases.

The charity’s byline is: Rescue, Rehabilitate, Rehome.

A spokesperson for the charity commented: “All of our rescued horses are treated as individuals and – being one of the smaller welfare charities – our staff get to know the likes, dislikes and foibles of each horse in our care, so their treatment can be personally tailored to their needs.”

After rehabilitation and when they are fit, their animals are placed on loan in private adoptive homes to lead happy, useful lives. Some have gone on to win at prestigious shows, and even appeared on television!

They continued: “We never sell them, so we are able to ensure their wellbeing for the rest of their lives; and if their loaners’ circumstances change, they can always be returned to us. Horses do so much for humans – we try to repay some of that debt; they cannot speak, but we can.”

Funds are urgently needed to continue that work: legacies, covenants, individual donations or corporate funding are all most welcome. Members receive a biannual newsletter keeping them up to date with all the happenings on the yard at Woodstock Farm in Norfolk.

For more information visit the website at www.horserescuefund.org.uk or email info@horserescuefund.org.uk. q

Helping the forgotten people of Zimbabwe

[ZANE: ZIMBABWE A NATIONAL EMERGENCY is a UK registered charity working to help the most destitute, vulnerable and impoverished people in Zimbabwe. It is the largest supplier of financial aid to elderly people in Zimbabwe who lost their life savings and pensions in the economic collapse and subsequent hyper-inflation.

This includes over 600 frail veterans and their widows who fought for the Crown. ZANE assists with rent, medical bills and food – and, crucially, also provides comfort, advice and support.

In addition, ZANE funds a clubfoot correction programme, successfully treating over 4,060 children to date. It funds the provision of prosthetic limbs for victims of landmine explosions and assists people with hearing loss. ZANE also funds education programmes including the provision of pop-up classrooms in highdensity townships for children who would otherwise not receive an education. It runs creative therapy workshops for women living in extreme poverty who are victims of political violence and trauma.

Zimbabwe remains in a state of crisis. The economy teeters on the brink of collapse. Fuel shortages are commonplace and with food prices escalating, ZANE’s aid is needed more than ever by the most destitute people in Zimbabwe. q • To find out more about the work of ZANE visit www.zane.uk.com