See below an article from WealthBriefing on UK IHT.

UK Inheritance Tax Take Booms By: David Bain: August 3, 2006

The UK Revenue & Customs is taking record amounts of revenue through inheritance tax, according to the accountancy firm, Grant Thornton.

The firm estimates the tax authorities have taken 42 per cent more in IHT in the last three years. It is estimated that £3.56 billion ($6.67 billion) will be passed on to the Revenue in 2006.

UK inheritance tax is charged at 40 per cent of the worth of all assets passed on above a set level.

Research from Grant Thornton last year calculated that 3.6 million people will be liable to pay inheritance tax by 2009 - a 70 per cent increase from 2002.

Currently, the inheritance tax threshold is £285,000 - lower than the average value of a house in London . The UK 's Chancellor of the Exchequer has said the threshold will rise to £325,000 over the next four years - but this increase is still below the long-term average growth of house prices of 7.5 per cent.

New Trusts
The UK Finance Act 2006 has introduced new rules on the Inheritance Tax (IHT) treatment of trusts, which will create potentially large tax liabilities for the unwary.

In response to this, we are pleased to announce that Friends Provident International have added the Absolute Discounted Gift Trust (ADGT) and the  International Loan Trust (ALT)

The ADGT and ALT are bare trusts, which means that they will not be affected by the new rules. In return for restrictions over beneficiary flexibility, individuals who use these trusts will benefit from the following features:

• Ability to carve out entitlement to a series of capital payments whilst reducing the value of their estate for IHT purposes
  
• No liability to the initial, 10 yearly or exit charges to IHT that have been introduced for flexible trusts
  
• No need to complete the IHT 100 form on creation of the trust

The additional features of the ADGT are:

• The initial gift is a PET
  
  
• Potential immediate reduction in the value of the taxable gift should death occur within 7 years of the trusts creation

The additional features of the ALT are:

• Loan repayments can be requested at any time
  
  
• All investment growth is immediately outside of the lender's estate

These trusts have been refreshed with new imagery and designed for easy use, with the specific intention of making the trusts easy to understand. Literature packs have been put together and include the following documents:

The documentation pack contains all the documents you will need. You'll find a product application form, underwriting form and the trust deed - all of which are easy to use and include guidance notes.