Summer 2005 Newsletter Content More of the same? Around the world Hot tips Inside out? Sweet sacrifice Simple trust Done and dusted? Open immediately File under E An Inspector calls CO still OK Open for business High PHI Arctic chills Duty calls Pensions Fuelling around WIP round Win some, lose some Take it and go? Party talk Work less, earn less Making adjustments

Done and dusted? If you want to save Inheritance Tax, you have to give your money or your assets away, and then survive seven years. You can save some money by surviving for a shorter period, because you fix the value of an asset - say a house - at the date of the gift. If you hold on to everything until you die, you are likely to pay more IHT (or your executors will do it for you). Of course, the ticklish questions are when 'your last seven years' begins, and how much you can give away but still live comfortably for the rest of your time. A number of tax plans have tried to let people have their cake and eat it - or, rather, have their cake and give it away - but these are now subject to some harsh anti-avoidance rules. A recent tax case highlighted another problem. A man offered to let his niece (and her dog and cat) live with him after her marriage broke down. He changed his will to leave her his house. Four years later, he gave her half the house, shortly before he died. His executors tried to argue that he had "really" given her half the house when she first moved in, because he had made her a promise and she had done something in exchange - she had agreed to live with him and look after him. But the Commissioners decided that he was a meticulous man who would not have left something like that to chance - if he had intended a gift at that time, he would surely have told her, or at least told his lawyer. So the gift was made too soon before his death to save much tax. It's always difficult to address IHT planning, because it's about death - but a big IHT bill can make dealing with a bereavement even worse. At the very least, it's worth having an idea of how much IHT your estate would pay, and what the main alternatives are to reduce the exposure. We will be happy to advise you.