One of the downsides of making lifetime gifts of capital is the inability to continue to enjoy the income from the capital if the gift is to be effective for inheritance tax (IHT) purposes. However, a scheme has been available based on the decision in a case called Eversden. This permitted continued enjoyment of the income so long as the capital was first passed by way of an IHT exempt gift to the individual’s spouse.Not surprisingly, the government has acted to block this perceived loophole with effect from 20 June 2003. However there are other planning opportunities that can be used to mitigate future IHT liabilities. We would welcome the opportunity to talk to you about estate planning. Please give us a call if this is an area of interest to you.