Rachel Stevenson: A race with the Revenue to hang on to big legacies

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Research from the Consumers' Association this week shows the number of people caught by the inheritance tax threshold has risen by more than 50 per cent in the past five years. The first £255,000 of your estate is tax-free, then IHT looms, with a swingeing 40 per cent cut on the rest of your legacy. With house prices rocketing, your home alone can take you over the threshold.

There are ways and means of getting around an IHT bill, but those loopholes are becoming tough to negotiate, thanks to the Inland Revenue. You can set up special trusts to mitigate your bill, or you can become "tenants in common" with your spouse instead of "joint tenants" which gives you double the allowance.

IHT is no longer the burden of the rich. If you want to pass on your estate to your family and not the Government, IHT advice might be a good investment unless the threshold is raised.

The millions of policyholders in Pearl Assurance, NPI and London Life were told this week that their funds were "ill-timed" acquisitions for AMP's Australian shareholders. It reported a record loss and blamed its UK businesses.

Not good for shareholders, but surely the UK policyholders should be asking why they have been left in this position by their parent, and why Pearl, once a cash-rich fund, was stripped bare by its owner. Its funds were used to purchase NPI and Henderson. Pearl, London Life and NPI join a growing number of closed with-profits funds, and many more could be joining them after three years of falling stock markets. So much damage has been done that any gains will go to replenishing reserves, rather than improving payouts. Most with-profits funds are less than 40 per cent invested in equities, so the participation in the market upturn is limited. There is little incentive for companies to improve the performance of closed funds.

Leaving the fund may be also be costly, but policyholders should be assessing their situation.

The new array of directory enquiries services is bound to have us all in a muddle for a while. I spend most of my working day on the phone, a lot of it trying to find numbers I need.

I have used some of the new directory enquiries numbers and encountered different service. Sometimes you get an automated answering service before a human suddenly comes to the phone. Sometimes the number you are given bears no relation to the number you wanted.

So I have decided to use one number only, but that may not be wise given the range of charges you can see from the table on the opposite page. And whatever you do, do not be put through to the number you want without finding out how much it costs.

The best phone directory discovery I made this week was the phone book. You don't have to talk to anyone, spell anything, or explain why you need the number for Big Ron's Sex Video Emporium (Look, it's research and I'm a journalist). And it is free. Rumour has it that they, too, may soon be no more. Shame.

r.stevenson@independent.co.uk

William Kay is away

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