Inheritance Tax is payable on death at a rate of 40% on assets held in excess of £300,000 (current tax year, 2007/08). This tax can be easily avoided through careful planning within your Will. This is probably the most cost efficient way of saving your estate a hefty tax bill on your death. Any property passing to a spouse on death is free of tax however without planning the effect of the increase in the survivor's estate on their death can lead to a significant tax bill.

Husbands and wives could leave Nil Rate Band Discretionary Trusts in their Wills. On the death of the spouse the balance of the nil rate band is placed into a Discretionary Trust created in the Will without prejudice to the survivor's comfort or security as the trustees have complete discretion on the distribution of the fund. Did you know that the Treasury pockets over £2billion a year in inheritance tax (according to Tax Action 2004 RAKM)?

The FSA does not regulate taxation, nor all forms of tax planning.