{"id":25676,"date":"2014-08-11T09:31:46","date_gmt":"2014-08-11T08:31:46","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=25676"},"modified":"2014-08-11T09:31:46","modified_gmt":"2014-08-11T08:31:46","slug":"hmrc-is-turning-its-attention-to-inheritance-tax-avoidance-but-evasion-may-be-the-big-issue","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/08\/11\/hmrc-is-turning-its-attention-to-inheritance-tax-avoidance-but-evasion-may-be-the-big-issue\/","title":{"rendered":"HMRC is turning its attention to Inheritance Tax avoidance – but evasion may be the big issue"},"content":{"rendered":"

The FT has noted this morning that<\/a>:<\/p>\n

A tax avoidance crackdown is set to turn the spotlight on previously undetected inheritance tax planning schemes, where HM Revenue & Customs suspects \u201csubstantial\u201d sums are at risk.<\/span><\/p>\n

HMRC is seeking to close loopholes that allow some\u00a0tax avoidance<\/a>\u00a0ruses to escape detection, amid signs that scheme promoters are increasingly turning their attention to inheritance tax as tax planning in other areas becomes more difficult.<\/p>\n<\/blockquote>\n

I do, of course, welcome a crackdown on\u00a0inheritance tax avoidance. It is necessary. Inheritance tax\u00a0losses already, according to HMRC<\/a>, cost the UK at least \u00a3400 million a year, or at least 12% of the\u00a0inheritance tax yield.<\/p>\n

Actually, I would suggest that this estimate is a work of fiction, but not because of avoidance but because of evasion. Let's offer a simple example of why this might be the case.<\/p>\n

Based on HMRC data for UK wealth, extrapolated from\u00a0inheritance tax returns, the UK is worth about \u00a33.5 trillion in all<\/a>, or \u00a34 trillion gross of mortgages, of which \u00a32 trillion is housing. Now I know that was 2010 data, but in many parts of the country house prices have not changed much since then.<\/p>\n

According to Land Registry\u00a0data on housing the average UK house price is currently \u00a3172,011<\/a> and there\u00a0are 19.3 million privately owned homes<\/a> in the UK (4.3 million of them are let out).\u00a0That makes \u00a33.3 trillion for that one asset alone.<\/p>\n

That difference is going to work through to the\u00a0inheritance tax yield in the end (and yes, I know about the surviving spouse exemption - but we all die in the end - which is the basis on which the HMRC data works).<\/p>\n

Something, somewhere is being seriously under-reported for\u00a0inheritance tax and i suggest that it is evasion and not just avoidance in play here. As for the loss, if anything like \u00a31.3 trillion of value is going missing from reported estates the under-declaration is going to be a lot more than \u00a3400 million a year, even given the time over which that value would have to be declared. It could run to billions a year.<\/p>\n

We have a tax gap on\u00a0inheritance tax for sure. But I suspect the government is looking at the wrong one. Evasion may be the game in town on this tax.<\/p>\n","protected":false},"excerpt":{"rendered":"

The FT has noted this morning that: A tax avoidance crackdown is set to turn the spotlight on previously undetected inheritance tax planning schemes, where
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30,10,55,50],"tags":[],"class_list":["post-25676","post","type-post","status-publish","format-standard","hentry","category-inheritance-tax","category-tax-avoidance","category-tax-evasion","category-tax-gap"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/25676","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=25676"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/25676\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=25676"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=25676"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=25676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}