Earlier this
month George Osborne delivered his Autumn Statement responding to the Office
for Budget Responsibility’s economic forecasts and he had a number of important
announcements for private client lawyers.
Of particular
interest was the announcement that the government no longer plans to introduce
a single settlement nil rate band which could be shared between all
trusts set up by a settlor, a concept that the government had proposed in a
June 2014 consultation. This settlement nil rate band would have been separate
from (and additional to) each individual’s personal nil rate band. Whilst the
proposal was considered overly complex and unfair by some it was not expected
to be abandoned.
In addition,
the government proposes to introduce a number of measures to prevent the
avoidance of inheritance tax through the use of multiple trusts, which private
client practitioners need to be aware of when drafting complex trust structures
in Wills.
Finally, there have been some small additions to
Inheritance Tax exemptions for emergency service personnel and humanitarian aid
workers (similar to the existing exemption for members of the armed
forces who die by injury while on active service) and for medals and other
awards.