The Treasury has responded to the Office of Tax Simplification's (OTS) reports on Inheritance Tax (IHT) and Capital Gains Tax (CGT). Some of the OTS's recommendations will be implemented while others have been rejected. 

Inheritance Tax

The OTS published its report on the Simplification of the technical design of IHT in July 2019. This outlined eleven recommendations including:

Government acknowledges that there are a wide range of views on reforming IHT. It notes that changes to reliefs and the lifetime gifts regime must be considered in their wider context along with policy issues.

At present, the government has decided not to proceed with any changes.

Capital Gains Tax

In the OTS’s second report on CGT, ‘Simplifying practical, technical and administrative issues’, published in May 2021, fourteen recommendations were made.

Five of these recommendations have been accepted by government as they are seen to offer practical simplifications for taxpayers. These are:

The Treasury's letter indicates that the detail of a further five OTS recommendations will be kept under review:

The four remaining recommendations by the OTS were rejected by the Treasury:

Useful guides on this topic

OTS publishes second report on Simplifying Inheritance Tax
Following a request from the Chancellor the Office for Tax Simplification (OTS) have completed their review into ways to simplify Inheritance Tax and have now published the second part of their report.

OTS review of CGT: Simplifying practical, technical and administrative issues
The Office for Tax Simplification (OTS) has published ‘Simplifying practical, technical and administrative issues’, its second report on Capital Gains Tax (CGT). It recommends extensions to certain reliefs and a new 60-day deadline for paying and reporting CGT on residential property sales.

External link

GOV.UK: Chancellor responds to the Office of Tax Simplification

Small acorn
If you like our content come and join us.

Thousands of accountants and advisers and their clients use as their primary TAX resource.

Register with us now to receive our unique FREE Tax Planning Tips and Advice Guide & our FREE OMB Newsletter.