Solicitors and accountants who advise on inheritance tax and trusts planning for wealthy individuals were yesterday taken aback by a decision by Gordon Brown to make signifcant changes to the inheritance tax treatment of trusts.

The new rules, which are expected to hit children and grandparents the hardest, will mean people will have to pay tax on trusts when they are set up if the value of the trust is higher than the nil rate band for inheritance tax (£275,000 in the current tax year).