Are you a scammer, loopholer or dodger?

The reason I ask this question is that the Government have indicated that it will target "scams, loopholes and dodges" and named PETs and Deeds of Variation as belonging to these categories.

A PET (a potentially exempt transfer) is a gift which may fall into some form of Inheritance Tax some later time and a Deed of Variation is the re-writing of a will after death subject to agreement of all the beneficiaries.

Both PETs and Deeds of Variation are well-established tax planning tools and, at the moment, are quite acceptable.

Deeds of Variation into Trusts or missing out a generation for most people may be golden opportunities to provide some substantial Inheritance Tax savings which would otherwise not be available.

Equally, a gift down a generation may avoid Inheritance Tax as the law stand provided the donor lives seven years.

Therefore, for people with substantial net worth - say more than £250,000 - this may be the ideal time to provide some substantial IHT savings for the last time.

However, as the saying goes "make hay while the sun shines" - as it would appear that sooner or later these opportunities may be lost forever, or at the very least, be severely restricted.

I think that my advice is that you should become a scammer, a loopholer or a dodger, but before doing anything you should talk to your normal professional adviser. It is a case of "act now before the milk is spilt."

Peter Meredith is a partner with Horwith Clark Whitehill in Bradford.

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