New guidance in Revenue & Customs Brief 34/10
HMRC has made changes to the circumstances in which it will consider an individual's domicile for inheritance tax purposes. Details have been published in Revenue & Customs Brief 34/10,
It seems that the existing guidelines were not working well. Under the new guidelines, HMRC will follow a risk-based approach: it will only consider opening an enquiry where domicile could be an issue, or making a determination of inheritance tax in such cases, where there is a significant risk of loss of UK tax. One must assume that the pressure on HMRC’s budgets has cut the resources available for IHT compliance work.
HMRC says it does not consider it appropriate to state an amount of tax that would be considered significant, as the amount of tax at stake is only one factor. In selecting cases HMRC will take into account the potential costs involved in pursuing an enquiry and in any resulting litigation.
Full details are in the Revenue & Customs Brief, and will apply to dispositions on or after 24 August 2010.
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