I’M not generally in the habit of quoting Spice Girls songs but it seems appropriate for this piece, write Paul Aplin.

I met some clients a couple of weeks ago to talk about inheritance tax.

About 45 minutes into the conversation I said: “Tell me what you want – what you really, really want.”

Then I said something that surprised them even more: “Forget about tax for a minute.”

Both had recently inherited money from their parents and they wanted to do what they could to make things easy for their own children in due course.

We talked about some fairly straightforward ideas such as making gifts to the children that would fall outside the scope of inheritance tax as long as they survived the gifts by seven years.

We talked about the little known exemption from inheritance tax for regular gifts out of income.

We talked about investing in business assets or Alternative Investment Market shares.

We touched on some more complicated ideas involving trusts and bonds.

All the while I sensed that they were not entirely comfortable.

And that’s when I asked them what they wanted – what they really, really wanted – and asked them to forget about tax for a moment.

They paused and looked at each other and then the husband said: “We just don’t feel ready for this, but we feel we must do something.”

They were both in their late 50s and I asked them if they felt they had enough income and capital to see them through the next 40 years.

What if they needed nursing or care home fees? What if interest rates remained low? What standard of living would they accept?

Then I asked them a more difficult question. They currently have a great relationship with their children, but were they confident that it would be the same if either of them developed Alzheimer’s?

My advice was to do nothing until they had re-thought their own needs. When they have done that we will talk again. They seemed enormously relieved.

Over the years I have seen several clients give too much away and regret it. I believe that one or two spent the rest of their lives worrying about their finances.

There are lots of ways to save inheritance tax, but being able to sleep at night without unnecessary financial concerns is far more important.

  • Paul Aplin OBE is a tax partner with A C Mole & Sons and chairman of the Technical Committee of the Institute of Chartered Accountants in England & Wales Tax Faculty; you can follow him on Twitter @PaulAplinOnTax. He and fellow tax partners Amanda Gunter and Paul Kingdom can be contacted on 01823 624450.