Clearly the stand-out proposal from the Office of Tax Simplification (OTS) must be the reduction of the seven-year gifting rule to five years. This will see individuals being able to gift down to their children and only have to survive five years for it to fall out of their estate for inheritance tax (IHT) purposes. This is a welcome proposal.

However, it does come with the removal of taper relief which means that substantial gifts will see no tax deduction after three years and will need to have a survival rate of the full five years to have any inheritance tax benefit.