The news that the Chancellor has asked the Office for Tax Simplification (OTS) to review Inheritance Tax (IHT) has been greeted with approval and apprehension in equal measure.

Approval because the review will focus on ensuring that the administration and payment of IHT are as simple and effective as possible; apprehension because of the ramifications it could have for business succession, and particularly, in the case of my clients, its implications for Agricultural Property Relief around which much estate planning is predicated.

The OTS is to consider whether current IHT rules distort decision-making in relation to transactions connected with estate planning, and it has stated that ‘[an] appropriate approach may be to review the whole of IHT rather than to consider individual IHT reliefs’. In other words, while streamlining the entire IHT edifice, all reliefs are up for review.

The most significant of these reliefs, as far as my clients are concerned, is Agricultural Property Relief (APR), which ensures the continuation of businesses through the process of succession: an IHT bill of 40 per cent on transfer of assets would destroy an agricultural business. Numerous estates have structured their affairs with regard to succession planning in full compliance with existing law; changing that law will have significant consequences.

As someone whose career has been built on providing scrupulously impartial evidence in court in relation to IHT cases on behalf of not only landowners but also the HMRC, I am not here to defend the status quo. What I would caution landowners to do, however, is to keep abreast of the review and seek advice on how their affairs may be affected by any changes that may be introduced in the future.

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