Will I be named and shamed?

Apparently, HMRC/the government plans to “name and shame” people who engage in legal tax avoidance (not tax evasion, which is illegal) and their advisers.

This is odd: why should people or their advisers be ashamed of legitimately arranging their affairs to reduce their tax bill? Is there some moral obligation to pay tax unnecessarily?

It is also quite worrying. I do not normally give tax advice. Indeed the only tax advice I give is to advise unmarried couples to get married – or enter into a civil partnership – as then gifts between them are exempt from inheritance tax (IHT), so if one dies their Will can leave their estate to the survivor with no IHT payable. This is as a result of a specific exemption set out in the IHT legislation, but it is “avoidance”, so apparently I should be ashamed of advising clients to do it (I’m not, by the way).

Indeed, because the nil tax band for IHT purposes (currently £325,000, which is taxed at “nil”, with everything else taxed at 40%) is unused where a husband (say) leaves everything to his wife, there is specific legislation enabling the surviving wife to use her husband’s unused tax band on her estate (so that her estate benefits from a double nil tax band of £650,000. This was introduced by the Labour government, but only so they could “shoot the Conservatives’ fox”, as it was being proposed by the Tories for when the formed a government.

So we have the very odd spectacle of a government saying it is shameful to avoid tax, but introducing specific ways of doing so.

It couldn’t all be playing to the gallery and grabbing headlines, could it? Surely not!

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