Dirty tricks

Much comment about the Chancellor taking action in the budget to thwart those seeking to avoid or minimise inheritance tax by creating trusts. There are two very valid points to be made I think - firstly that he is seeking not merely to prevent people doing this in future, but also to make ineffective such trusts as already exist. In other words, this is retrospective legislation - something which governments rarely do, and usually only in cases of dire necessity, and this can hardly be considered to fall into that category. Secondly, it blurs the distinction between tax avoidance - that is, so arranging your affairs that you pay as little tax as possible - which is entirely legal, and tax evasion - failing to pay tax which is due from you - which is illegal. These trusts were a form of tax avoidance, and although it is perfectly within the Government's right to change the law so as to make them illegal in future, they were legal when created, and to retrospectively make them illegal is a misuse of Government's powers.