Overview

This bill proposes to amend the Inheritance Tax Act 1984 to exempt certain transfers of value between siblings from inheritance tax. The exemption applies only under specific conditions relating to the length of time siblings have lived together and the age of the recipient sibling.

Description

The bill adds a new section (18A) to the Inheritance Tax Act 1984. This section introduces an exemption for inheritance tax on transfers of property between siblings if two conditions are met:

• The siblings must have lived in the same household continuously for at least seven years leading up to the transfer.
• The recipient sibling must be at least 30 years old at the time of the transfer.

The definition of "sibling" includes brothers, sisters, half-brothers, and half-sisters. The exemption applies to the value of property transferred that becomes part of the recipient sibling's estate or increases the value of that estate. The Act extends to England, Wales, Scotland, and Northern Ireland and comes into force two months after it is passed.

Government Spending

The bill is expected to reduce government revenue from inheritance tax. The exact amount is difficult to predict without knowing how many sibling-to-sibling transfers will meet the criteria for exemption. The reduction in government revenue will depend on the number of qualifying transfers made and the value of the assets transferred.

Groups Affected

This bill primarily affects:

• Siblings: Those who meet the criteria for exemption will see a reduction or elimination of inheritance tax on transfers of property to their siblings.
• The UK Government: A reduction in inheritance tax revenue is expected.
• Inheritance Tax Professionals: These professionals will need to be aware of the new legislation to advise clients correctly.

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