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By Sophie Smith, personal finance reporter

Britain’s most hated levy could face the most radical reform since it was introduced more than 30 years ago if new proposals are adopted into law, which would result in tax breaks that would allow more wealth to be passed down each year.

The Office of Tax Simplification (OTS), an influential independent adviser to the Government, said inheritance tax was overly complex and “uniquely unpopular” as part of its recommendations for changes to the regime, including an overhaul of outdated “gifting rules”.

It said the current annual tax breaks on gifts and wedding gifts should be scrapped and wrapped into a single, higher “personal gifting allowance”. The allowance would stand at 11,900 today if it had kept pace with inflation rather than being frozen since 1981.

At present, sums up to 3,000, plus 1,000 for wedding presents and smaller gifts of 250, can be given away tax-free each year. Gifts in excess of this face being subject to 40pc inheritance tax.

But it's not all good news. Personal finance editor Sam Brodbeck explains how one lucrative loophole may be shut as part of the OTS's plan.

Confused by inheritance tax? In our guide here, we explain how much you'll pay – and how to cut it. One Telegraph Money reader invested his way out of a 40k inheritance tax bill. Find out how here.

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Annette Curtin said about This inheritance tax loophole allows unlimited gifts – take advantage before it's axed: "IHT is the most insidious tax known to man. It penalises the people that have worked hard and want to pass the fruits of their labours onto their offspring. It is tax payable on already taxed money."

Graham Palmer said about Trapped Woodford investors suffer dividend cut: "The fund and the manager are toast, it needs to be wound up and a final distribution made. Other funds may want to buy some of the assets so it needn't take forever."

Matthew Fletcher said about Gold hits seven-year high – and Jacob Rees-Mogg saw it coming: "150 years ago an ounce of gold was worth 4 5s – a week's pay for a decent professional salary in Victorian London. Today it's worth around 1,100 – again a decent professional week's pay in London. Gold is a great store of value and, when priced in devaluing currencies, it will appear to increase in price but the reality is that it doesn't increase in real terms at all."

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