KPMG has warned tax advisors to expect to changes to inheritance tax rules in next month’s Pre Budget Report due to be announced on 6 December.

David Kilshaw, head of private client advisory at KPMG in the UK, said: ‘The chancellor has a track record of introducing measures which restrict inheritance tax planning options in his Pre Budget Reports and Budgets. We would not be at all surprised to see similar moves this time around and would advise anyone seriously considering undertaking any form of inheritance tax planning to bear this in mind.’

Kilshaw said Brown had given himself a ‘platform for change’ and could ‘increase greatly the reach of inheritance tax while appearing only to make minor adjustments’.

‘For example, the rate at which trusts are taxed could be revised; now that most trusts are subject to tax every ten years, the maximum rate could be increased from 6% to 12%,’ he added.

The Treasury raised £3.3bn from inheritance tax in 2005/06.

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