Discretionary Trust Tax

article in the Daily Telegraph April 14, 2007

Avoiding inheritance tax with an assessment of trust "is perfectly legal, and lets you control your assets and income during your lifetime.

Equally important, it allows you or your spouse in control of the assets and income when one of you dies.

So unless you want to leave up to 40% of the value of your home and savings to the Treasury, which should be the cornerstone of the strategy for most married couples tax avoidance (as is usually the strategy most cost effective) and can even be used to avoid inheritance tax on family home.

There is always a free transfer between spouses so there would be no inheritance tax liability anyway. It would be preferable to use a discretionary trust and name your children and your spouse, your trustees have the discretion to pay benefits to your spouse or children according to your wishes.