No reform of Inheritance Tax or Capital Gains Tax

by | Nov 22, 2023 | Tax

The abolition of the Office for Tax Simplification (“OTS”) was one of the surprises announced by Kwasi Kwarteng’s so-called mini-budget of September 2022 – and one that survived the change of Prime Minister shortly after.

The OTS closed earlier this year, and instead the government made a general commitment to embedding tax simplification into its policy making. This pledge was reiterated in the 2023 Autumn Statement communications.

It is three years since the OTS published a report on simplifying Capital Gains Tax, which included the possibility of aligning Capital Gains Tax rates with Income Tax rates.  Despite being trailed periodically since, there were no changes to Capital Gains measures included in the 2023 Autumn Statement.

Reforms to Inheritance Tax have also been subject to much recent speculation.  The OTS made recommendations on IHT too, most of which have never been implemented.  The Autumn Statement was silent on this as well.

The government did however state that some measures were examples of simplifications; from choosing ISAs to withdrawing the self-assessment filing requirement for those with only Pay As You Earn income.

The overall themes this year were more about using the tax system as a driver for growth, in contrast to some past fiscal events that have focused on clamping down on avoidance.  There were a few measures announced as “Tackling the Tax Gap”;  for example: legislation to require employers, company directors and the self-employed to provide new or improved data to HMRC.  There has been a growing desire for tax payers to provide more and more data to HMRC, and we await further details on this new law.    There will also be tougher consequences for promoters of tax avoidance. Notwithstanding two decades of reform, there are still concerns in some areas, and HMRC will receive new powers to clampdown even further.

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