Tax year end planning: Inheritance Tax


It was announced in the 2014 Autumn Statement that the proposal in the 2013 Budget for a single nil rate band to apply to all trusts created by the same settlor, will not now be introduced.

However since 6 April 2014, income which has remained undistributed for more than 5 years at the date of the 10 year anniversary will now be treated as part of the trust capital and fully liable to IHT. Previously the rate of inheritance tax on such income would be proportionally reduced to reflect the period of accumulation.