PRINCIPLES OF A SOUND ESTATE PLAN

1. Focus first on your objectives - don't let reducing Inheritance Tax overrule common sense, or your wish to consider the financial needs of different family members and other potential beneficiaries.​

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2. Keep your planning as simple as possible. Bear in mind that tax law - or your personal circumstances - can change, and complex schemes may be difficult, expensive to unravel and may ultimately fall foul of HMRC.

3. Early planning offers the greatest opportunities. The sooner you can give away assets, the more likely you will survive the gift by at least seven years.

4. Even late planning is better than nothing - for example, ensuring that you have used up your annual gift allowances.

5. Don't take risks you cannot afford. For example, investing in AIM shares might be a useful way of reducing likely Inheritance Tax - but could also expose you to the risk of substantial falls in the value of the shares. A mix of different strategies may be an effective way of protecting against such risks.

6. Ensure that you take into account the full tax picture. For example, disposing of assets during your lifetime may give rise to a Capital Gains Tax charge that offsets or even outweighs any likely Inheritance Tax saving.

7. Consider the long-term view. Assets that your beneficiaries will receive may in turn form part of their estates when they die - and be liable to Inheritance Tax then. Skipping a generation (i.e. giving gifts to your grandchildren rather than your children) may be an option for overcoming this.