Inheritance tax on trusts

In addition to the extensive changes made by the Finance Act2006 to the inheritance tax rules on trusts, there is now afurther significant development. HM Revenue and Customs (HMRC)have recently responded to a number of questions raised by severalprofessional bodies including STEP (the Society of Trust andEstate Practitioners) and the CIOT (the Chartered Instituteof Taxation) on a number of detailed points on the new legislation.The responses from HMRC are very helpful and will clarify anumber of important matters, although there are a number ofissues that still need to be resolved. The main areas whichwere covered in the questions are outlined in this article.