STEP Urges UK Participation In EU Review Of IHT Law

by Jason Gorringe, Tax-News.com, London

16 December 2009

The Society of Trust and Estate Practitioners (STEP) has written to the UK's Parliamentary Under Secretary of State for Justice, Lord Bach, urging him to ignore recent 'scaremongering' in the press over draft EU Commission regulations on inheritance tax laws – the so-called “Brussels IV” proposals.

Commenting on the letter, Richard Frimston, the Chairman of STEP’s Cross-Border Estates Group, explained that:

“Some of the recent press comment on the EU Commission’s proposals, such as labeling it an 'EU house grab law,' has been utterly misleading. Over 10% of UK estates now have a cross-border element and this figure is growing rapidly, partly reflecting the popularity of buying property in EU countries such as France and Spain.”

“The problem is [that] the current arrangements for dealing with someone’s affairs after they die if their estate contains overseas assets are complex and expensive. The result is that a large part, in some cases almost all, of many smaller estates are swallowed up in costs and taxes. The EU proposals therefore address an important issue and deserve careful consideration.”

The UK has to decide in the New Year whether to “opt in” or “opt out” of the EU’s proposals.

Frimston explained that “there are complex issues to consider when looking at any decision about the UK formally opting in at this stage to the EU’s draft proposals".

He concluded: "The great majority of professional advisors in this area nevertheless recognize the need for reform in the way cross-border estates are handled. The focus should be on how we can achieve the best regulation for the benefit of both UK citizens and also other EU citizens resident in the UK or with UK assets."

"We have therefore urged the government to engage positively in the coming discussions and ignore the seriously misleading comments recently surfacing in the media and from various lobby groups.”

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