Inheritance tax planning has become more confused since the finance act 2006, highlighting the need for good counsel from tax advisers Changes to tax law further complicates IHT

By Nigel Smith, Technical Consultant, Friends Provident International The inheritance tax (IHT) regime introduced by the Finance Act 2006 is now upon us and this means solutions previously relied upon by tax advisers may no longer be appropriate. The changes mean that IHT planning has become more difficult. Most insurance-based IHT plans were based on lifetime flexible trusts, which means, under the new rules, there could be a potential 20% IHT liability on the way in and a maximum 6% charge every 10 years when capital leaves the trust. The simplest way to plan for IHT is to cover the l...