In the United Kingdom,
Her Majesty's Revenue and Customs
, patch =
, patchcaption =
, logo = HM Revenue & Customs.svg
, logocaption =
, badge =
, badgecaption =
, flag =
, flagcaption =
, image_size =
, co ...
acted against certain
inheritance tax
An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died.
International tax law distinguishes between an es ...
(IHT) avoidance schemes by imposing a standalone income tax charge. The tax was introduced in the
Finance Act 2004
The Finance Act 2004 (c 12) is an Act of the Parliament of the United Kingdom. It prescribes changes to Excise Duties, Value Added Tax, Income Tax, Corporation Tax, and Capital Gains Tax. It enacts the 2004 Budget speech made by Chancellor of th ...
and came into effect from 6 April 2005.
This has become known as pre-owned assets tax (POAT). POAT applies where an individual disposes of an
asset
In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...
but somehow retains the ability to use or enjoy it. POAT is never applicable when IHT is; therefore, the media and public have granted the issue little attention. POAT is also a retroactive tax: even if an action had no IHT repercussions at the time, POAT may be applied years after the action.
External links
HMRC page on Income tax and pre-owned assets
Income taxes
Taxation in the United Kingdom
{{Tax-stub