Under pressure from the opposition, the Labour government have pushed through some last minute changes to the inheritance tax laws, which were announced in yesterdays budget speech.  New laws mean that married couples and civil partnerships can now claim a combined inheritance tax allowance of some £600,000, and this figure is set to rise to £700,000 by 2010.  So what does this really mean?

While the change has grabbed the headlines, there are many who are sceptical about what it actually means in practice.  Currently all assets lef to a spouse in a will are free of inheritance tax, so there would be no savings here, however, when the second partner dies (assuming the first used none of their inheritance tax allowance) they will be able to shelter the first £600,000 of their assets from the tax man.

When you consider that the average rice of a house in the UK is currently around the £200,000 mark, there are very few people who would actually use the combined £600,000 allowance.  However, it will offer comfort to those whose partner has passed away, as they will be able to claim the combined allowance on a backdated basis.  When you consider that Gordon Brown had 10 years as Chancellor to change the inheritance tax laws, many are scathing of his reasons for doing it now, i.e. the pressure exerted by the Tory party.

What was clear in this years budget was the fact that the UK economy is slowing and the business environment will become tighter over the next few years.  Gordon Brown has until at the latest 2010 to turn around the economy and announce an election, which he hopes will probably coincide with an up turn in the economy.  After 10 years of smash and grab, there are many privately thinking it is may be pay back time for the ex-Chancellor.

Having waited 10 years to be shoe horned into the role of Prime Minister, he may well experience a very difficult tenure - one which may well turn out to be his last.