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Surprisingly, for a Budget that targeted high earners with a new top income tax rate of 50 per cent, a corresponding rate increase for inheritance tax on the wealthiest estates did not follow and the flat rate of inheritance tax of 40 per cent remained.

The trust rate of tax was, however, increased from 2010 to 2011.

Only Budget Note 50 dealt with inheritance tax and addressed an issue which had arisen at European level in relation to agricultural property relief and woodlands relief.

In January of this year, the European Commission had formally requested the UK government to address these inheritance tax reliefs, which were geographically restricted and did not cover agricultural property or woodlands in Europe.

The commission argued this made it less favourable for UK taxpayers to own these types of property in Europe. The choice for the government was either to withdraw these valuable reliefs or to extend them to such property in other European countries.

By choosing the latter route, the government has avoided a backlash from farmers who would have argued farming as an economic activity and way of life was at risk without agricultural property relief giving relief from inheritance tax.

For discretionary trusts, the dividend trust rate will increase from 6 April 2010 from 32.5 per cent to 42.5 per cent. The trust rate of tax will increase from 40 per cent to 50 per cent. This will mean smaller income distributions being available for beneficiaries.

These figures replace those announced in the Pre-Budget Report of last year, which involved smaller tax increases from 2011 to 2012. This acceleration and increase in these trust tax rates shows that discretionary trusts are being viewed as a justifiable target similar to the highest earners, except for trusts there is no £150,000 threshold before this rate kicks-in.

Trustees holding investment bonds will be pleased to enjoy tax deferral of an even bigger amount of tax from next year.

If ever the Labour government had wanted to restructure inheritance tax to target those leaving the wealthiest estates, arguably the prevailing economic and political conditions would never have made it easier for such measures to be introduced.

With a little more than 12 months to go until a general election, perhaps the feeling was that inheritance tax should be left alone.

Julie Hutchison is head of estate planning for Standard Life