IHT Disclosure of Tax Avoidance Schemes from April 2018

The Disclosure of Tax Avoidance Schemes (DOTAS) legislation, targets taxpayers who implement listed tax avoidance schemes as well as the promoters of tax avoidance schemes. New regulations came into force on 1 April 2018 that extended the scope of the IHT hallmark to make it more comprehensive.

HMRC has been careful to listen to concerned practitioners to ensure the new hallmark is appropriately targeted to catch IHT avoidance schemes, but not the straightforward use of reliefs and exemptions or ordinary tax planning arrangements.

The new regulations add new descriptions of disclosable arrangements, which are designed to reduce the value of an estate on death or those which seek to avoid certain other IHT charges in addition to ‘entry charges’ on relevant property trusts.

The new hallmark also ensures that established retail products, which accord with established practice that HMRC has previously accepted, do not have to be disclosed if they were first made available and entered into before 1 April 2018.