Inheritance tax gifting rules should be dramatically simplified in the next Budget, according to Sean McCann, financial planner at NFU Mutual.
Mr McCann said all existing exemptions should be replaced with one single annual exemption of at least £10,000, which would increase in line with inflation.
As part of its pre-Budget review of inheritance tax, the Office of Tax Simplification has scrutinised the current annual limit of £3,000, marriage gifts of up to £5,000, individual gifts of less than £250 and rules for gifts out of normal expenditure.
Inheritance tax receipts hit £2.4bn in the first five months of the tax year while receipts for the 2017 to 2018 tax year hit a record £5.2bn.
Mr McCann said: "Inheritance tax is a fiendishly complicated tax, feared by many and understood by few. The rules on gifting have remained largely untouched for over 30 years.
"Personal finances have moved on a great deal in the last 32 years and it is about time the limits and exemptions matched the needs of 21st century families.
"It is true that you can't add simplicity, you can only remove complexity, so a sensible approach would be to replace all the existing exemptions with one single annual exemption of at least £10,000 which would increase in line with inflation.
"Rather than a radical overhaul of inheritance tax in the Budget, we are likely to see some simple changes that will help people pass on more of their wealth without the fear of triggering a tax charge.
"A healthier £10,000 annual exemption along with simpler, clearer set of rules would ease the burden on families."
rosie.quigley@ft.com
