• Tue. Jul 16th, 2024

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Latimer Hinks dismisses Treasury response to open letter as “inadequate”

(C) KJB-photography 2010Firm will continue to campaign for change with Inheritance Tax petition

Leading North East law firm Latimer Hinks has slammed the reply received to an open letter to Chancellor George Osborne as “inadequate”.

Latimer Hinks CEO Anne Elliott, along with senior colleagues at the Darlington firm, wrote to Mr Osborne to demand changes to what they describe as the “discriminatory” Inheritance Tax Residence Nil Rate Band (RNRB) announced in his latest budget.

The new rules mean that by 2020/21 married couples and civil partners will be able to leave estates including their homes worth up to £1m to their descendants without them paying Inheritance Tax. But, this family homes element (worth, in the future, up to £350,000) only applies to gifts to direct descendants, meaning those who do not have children, stepchildren or grandchildren to pass their homes onto, will not be eligible.

Anne Elliott said: “We felt compelled to take action after speaking to many of our childless clients who will not benefit from the new rules. It’s nothing short of discrimination to say if you don’t have children, you will not get the same financial advantages as those who do.”

She is continuing to campaign for change through a parliamentary petition.https://petition.parliament.uk/petitions/105736

In its reply to the open letter, the Treasury sets out changes to the Inheritance Tax system before saying: “You asked why the new allowance applies to direct descendants, such as children and grandchildren, but not others.

“The Prime Minister and Chancellor of the Exchequer have both highlighted that when you become a parent, the wish to pass something on is the most basic, human and natural instinct there is. Focusing the policy on children and grandchildren ensures parents know that they will be able to pass on the family home that they have worked hard for to the next generation without the worry of inheritance tax. Around 80% of estates with both a residence and an inheritance tax liability are expected to be in a position to benefit.”

But Anne said: “We’re glad to have had a response from the Treasury, but it does not address our issue with the new legislation. The fact remains that this legislation only benefits a certain percentage of the population and is discriminatory.

“We have clients who don’t have children either because of choice or because they can’t, but who desperately want to leave their homes to their loved ones, whether it’s their sister, their niece or a close friend, without the recipient being hit with a hefty tax bill.

“Unmarried sisters may, for example, continue to live together in what had been their and their parents’ home. Also, in later life, an unmarried or childless widow(er) may live with a family member or close friend following issues which have arisen where death has necessitated the sale of what is considered to be the family home.

“We are continuing to campaign for a legislation change so that not just 80% but 100% of individuals or families can benefit from the same allowances.”

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