Currently the Disclosure of Tax Avoidance Schemes regime, or DOTAS as it is more commonly known, requires individuals and their advisers to notify HM Revenue & Customs of any tax avoidance schemes within a set time scale. It has been in existence for some time but currently only applies to inheritance tax to the extent that a scheme seeks to avoid an inheritance tax entry charge on a lifetime transfer into a trust.
Draft regulations have been published that could see individuals and their tax advisers having to disclose participation in all but the most basic of inheritance tax planning. The draft regulations were published on 16th July 2015 and are out for consultation until 10th September 2015. The draft regulations may be found at – https://goo.gl/LTxiu3
The draft regulations state that disclosure will be required of all arrangements the main purpose of which might reasonably be expected to secure an inheritance tax advantage where either the arrangements involve one or more contrived or abnormal steps without which it may not be possible to obtain the inheritance tax advantage, or where a person would be unlikely to enter into one or more elements of the arrangements other than to obtain an inheritance tax advantage.
As things stand the latter condition is particularly unclear and potentially very wide indeed. There are specific exceptions, most notably for planning by means of a Will, but these are in contrast fairly narrow. A great range of lifetime inheritance tax planning arrangements, either on death or on lifetime transfers, could potentially be caught.