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 related to the length of time siblings have lived together and the age of the receiving sibling.

Description

The bill adds a new section (18A) to the Inheritance Tax Act 1984. This new section introduces an exemption for inheritance tax on transfers of value between siblings. The exemption is conditional:

• The siblings must have lived in the same household continuously for at least 7 years prior to the transfer.
• The receiving sibling must be at least 30 years old at the time of the transfer.
• "Sibling" includes brothers, sisters, half-brothers, and half-sisters.

The exemption covers the value of the transferred property that is included in the receiving sibling's estate, or any increase to that estate resulting from the transfer.

The bill applies to England, Wales, Scotland, and Northern Ireland and comes into effect two months after it becomes law.

Government Spending

The bill is expected to reduce government revenue from inheritance tax. The exact amount is difficult to predict and will depend on the number of qualifying sibling transfers. No specific figures are provided in the bill itself.

Groups Affected

The following groups are primarily affected:

• Siblings: Siblings who meet the conditions outlined in the bill will benefit from reduced or no inheritance tax on transfers of property to each other.
• HMRC (Her Majesty's Revenue and Customs): HMRC will see a reduction in tax revenue collected through inheritance tax.
• Estate Planners: Estate planning strategies may need to be adjusted to take advantage of the new exemption.

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