IHT report threshold 'will increase'

Reports over the weekend indicate that the government intends to increase inheritance tax (IHT) reporting limits on gifts into trusts.

According to the Sunday Telegraph, the threshold will rise from £10,000 to £200,000, in a move designed to lessen the administrative burden on HM Revenue and Customs.

The Association of British Insurers has been credited with the apparent insight, after a circular to members last week outlined the proposals.

Gordon Brown introduced a series of measures in last year's Budget that expanded the applicability of IHT. Interest-in-possession (IIP) trusts and accumulation and maintenance (A&M) trusts were both brought within reach of IHT, much to the frustration of many individuals.

While increasing the reporting limits would not affect the amount of tax owed, it would reduce the administrative burden on those making use of the trusts.

Many have been frustrated for some time that individuals are required to report gifts of £10,000, despite the fact that the IHT nil-rate band currently stands at £285,000.