Pre-Budget Report - inheritance tax relief

I mentioned earlier that I would be taking another look at today's announcement on inheritance tax, to see how it might work in practice. I have looked into it a bit more, and can report that the tax benefits purported to be conveyed by this relief, are already available, without the need for today's announcement. It is currently possible for spouses and civil partners to draw up their wills using nil band discretionary trusts to achieve exactly what Alistair Darling has so generously given us today. So a little bit of tax planning from a high street practitioner would achieve the same result. People who are worried about inheritance tax would have taken these steps, anyway, as one would assume that their lawyer would have advised them to draw up appropriate wills. Therefore, all that Darling would have saved them by today's announcement, is the lawyer's bill - approximately £1,000.

I mentioned in yesterday's post that, in typical Gordon Brown style, any inheritance tax relief would be 'stingy, complex and extremely difficult and wasteful to administer'.

Stingy: check.
Complex: let's wait and see the paperwork claimants have to fill.
Extremely difficult and wasteful to administer: it shouldn't be too hard to administer this tax allowance, but I will wait until I see the paperwork before I give my conclusion. This, remember, is a Government that never does things the simple way.