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Can I invest to avoid an inheritance tax bill?

As I am getting on myself, I am worried that on top of my other assets, even though these are not significant, I might end up paying inheritance tax on this little nest egg. A friend has said I should think about investing in a certain type of shares which might be exempt from inheritance tax. Mike Hodges, tax partner at Saffery Champness, says that while you haven’t mentioned any figures, presumably when combined with your existing assets your recent inheritance may take you over the inheritance tax nil-rate band of £325,000 and, if you are entitled to it, the additional residence nil-rate band of £175,000.