Act now to avoid the inheritance tax net

The tax rules on gifts via trusts have been changed but investors still have a grace period of a year to make changes to avoid the new regime

In the budget of 2006, the inheritance tax (IHT) treatment of gifts via interest in possession (IIP) trusts, and accumulation and maintenance (A&M) trusts, was changed, so that where once investors were able to mitigate tax they will now fall into the IHT net. However if investors take action to change their trusts before 5 April 2008, they could avoid this. Under the new regime, IIP or flexible trusts could face ten-yearly and exit charges for IHT, and this applies to all gifts since 22 March 2006. However if investors change the beneficiary in the trust before 5 April 2008 they can avoi...