Don’t leave it all to Gordon by mistake

Ian Cowie says the simplest ways of avoiding inheritance tax are the best — especially when the law keeps changing

If there is one thing worse than paying inheritance tax, it is discovering at the graveside that an expensive IHT-avoidance scheme has proved a waste of money, in addition to what you are going to have to pay HM Revenue & Customs anyway.

A family friend had that infuriating experience recently, and many more widows — for it is usually the wife who is left to pick up the pieces — will suffer a similar fate in future. The reason is that Gordon Brown has become increasingly cavalier in making retrospective changes to legislation in ways many busy families fail to notice until it is too late.

For example, the imposition of a pre-owned assets tax (POAT) in April 2005 substantially tightened rules against gifts ‘with reservation’ — that is, where donors retain some benefit from the family home or other assets.