Let us think about this. It favours married homeowners or civil partners with children who will eventually be able to give away £1m tax-free.
If you do not have children and want to leave money to nieces and nephews, tough – you just get £650,000 between you.
If you share your home with a sibling or are a single parent sharing with a child, you can only leave them £325,000 – and they may well have to sell the family home as a result.
If you are wealthy enough to be able to give away money while you are alive then it will drop out of your estate after seven years. If you are not, tough again. Your estate will be assessed for tax on the whole lot.
If you share your home with a sibling or are a single parent sharing with a child, you can only leave them £325,000If you are mega-rich and can afford to give away more than £325,000 then the top slice of that will start to drop out of your estate after three years. If you are poorer, tough once more. The whole lot will still be assessed for seven years.
Then do not get me started on the bizarre exemptions that have not been increased for decades. The £3,000-a-year annual allowance actually appears to mislead people into thinking this is all they can give to their offspring each year without facing a tax bill when they die.
Few seem to realise they can give away as much as they like and this would provide an incentive for their children to keep them alive for seven years. Then what is that £250 per person gift allowance all about? Does anybody actually take any notice of it any more?
Why would the rules allow me to give my stepson an extra £5,000 if he gets married, yet not when he sets up home on his own?
Even for those who benefit from the married person’s transferred allowance there are massive complexities in calculating how much can be transferred if some money was distributed at the time of the first death.
These become even more complex in the very old where one partner died under former tax regimes.
Yet the danger with any so-called simplification – especially with this chancellor – is that it is likely to lead to many of us paying more tax.
So, while I welcome an OTS investigation into IHT, I do so with a touch of trepidation.
Embrace change to stop scammers
Should those transferring their pension benefits be auto-enrolled into free Pension Wise guidance?
It is a debate with valid arguments on each side.
Tom Selby, senior analyst at AJ Bell, said: “Automatically enrolling members into guidance for each transfer or every time they took money from their own pension pot – when they have already decided what they want to do – would have caused massive delays and huge complaints.”
But former pension minister Ros Altmann argued: “More and more people are being scammed, many customers are buying over-priced products and the take-up of free guidance has been low.”
So it is convenience against protection.
The House of Lords' amendment to the Financial Guidance and Claims Bill would have provided a further nudge towards making sure every aspect of what could be a life-changing decision had been considered. But members could alter appointments or simply choose to cancel them and not take up guidance.
The Commons amendment that over-ruled this is little change to the status quo, with people being asked whether they wish to wait until they have received guidance or advice before accessing their pot and transferring.
That may not be enough.
I was recently contacted by someone who appears to have lost his pension worth almost a quarter of a million pounds to a scam.
Auto-enrolling into free guidance might not stop people from making bad decisions, but surely we should embrace any change that can help thwart scammers and protect pensions.
Scared of dodgy products
The FCA has warned that although lenders are writing to customers who have interest-only mortgages, consumer engagement is low.
Should we be surprised that people are reluctant to contact their bank when it probably flogged them the failing endowment that went with their mortgage?
They are probably still scared stiff of being sold the latest dodgy product. Interest-rate swaps anyone?
For some I suspect the only solution will be to go directly from a normal mortgage to a lifetime mortgage. That will not be a disaster as long as the industry is innovative and the regulator supportive.
Tony Hazell writes for the Daily Mail's Money Mail section
