Inheritance Tax Planning Under The Spotlight

There is a fine line between legitimate tax planning and tax avoidance. The latter can be caught under the statutory "general anti-avoidance rule" if it constitutes a tax arrangement that is sufficiently abusive in nature; but the former represents an individual's right to fairly organise their affairs to keep their tax exposure to a minimum. Tax avoidance has been in the Government spotlight for some time, and has also recently hit the headlines following the so-called "Panama Papers" leak.

One of the Government's recent initiatives to clamp down on tax avoidance is their consultation on the Disclosure of Tax Avoidance Schemes ("DOTAS") regime published on 20 April 2016 ("the Consultation"). Under DOTAS, certain types of tax planning must be disclosed to HMRC, giving them a chance to review and rule on the legitimacy of the planning. To date, in relation to inheritance tax, the DOTAS regime has only applied in a fairly narrow context, but the recent consultation