A classic example of this occurred when shadow chancellor George Osborne effectively offered a pre-election confirmation of the Tories’ autumn 2007 pledge to raise the threshold for inheritance tax (IHT) to £2m – by allowing couples to transfer a spouse's £1m allowance on their death to the surviving partner – which could prove to be a disastrous illusion for families thinking they will be protected from this widely loathed tax.

To push IHT planning to one side on the back of what is in reality a tenuous election promise – which is the likely result of this announcement for many taxpayers - is extremely dangerous.

While a £2m threshold would liberate many homes from the spectre of the 40% tax, the reality is that Osborne has yet to nail his colours to this particular mast and unveil a coherent plan as to how he would achieve this solution. It is easy to talk the talk. Implementing a proper fiscal strategy is another matter.

There is a double danger at work right now. Many homeowners up and down the UK will be thinking that the current slide in property values will shield them from IHT.
Mortgages are difficult to come by and property prices are consequently falling, but underlying demand continues to grow.  With builders laying off their workforces and Government targets for new housing falling drastically behind schedule in both public and private sectors, a further surge in house prices is virtually guaranteed.

So whilst the IHT threshold might rise, property values are not going to be far behind, with a recovery coming perhaps as early as 2011.Most of the voting public now assumes the Tories will come to power – if not next year, then in 2010. But opposition parties always talk up their manifesto in order to win votes.

In the absence of a coherent IHT strategy, our view is that the Tories will initially increase the individual Nil Rate Band to £0.5m so that there is a joint allowance of £1m. But even this increase assumes that they can cope with the financial consequences, which is far from a certainty bearing in mind deteriorating/ collapsing position of government finances.

Wealthy people should move assets out of their estates as soon as possible to start the seven year clock ticking, using sophisticated trust style planning where they can retain access to those assets in the future should this be necessary.
This is particularly true at present when financial assets can be transferred at market-depressed prices thereby enhancing the impact of the planning so that recovery occurs outside of their estates.

Politicians will always want to offer tax cuts, or at least no tax rises, however the reality is that in the economic turmoil we currently find ourselves in tax rises are more likely than tax cuts.