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+44 (0) 1803 659659
email
adrian.howard@sjpp.co.uk
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For Inheritance Tax (IHT) purposes, gifting can be a good way to reduce the value of your estate. 

Making a gift of money(or assets) to family or friends while you are still alive not only benefits them immediately but could also benefit them when your estate finally needs valuing.

There are various types of “gifting” you could use:

  • Annual Gift Allowance - While you’re alive you have a gift allowance of £3000 per tax year. This is called an Annual Exemption.
  • Life Insurance Policy written "in Trust" - Using income to fund contributions to a Life Insurance Policy written "in trust" can help your beneficiaries immediately pay off some or all of an Inheritance Tax (IHT) bill.*
  • Wedding Gifts - You can gift various different amounts of money to a child, grandchild, great-grandchild, friend or relative in the event of marriage or civil partnership. Gifts must be made before the wedding and the wedding has to take place.
  • Lifetime Gift of Capital - Under certain circumstances a gift of capital designed to maintain a dependant may be exempt from Inheritance Tax.
  • Gifts to Charity - Gifts you make during your lifetime, or gifts you leave in your will to charities, political parties or for the public benefit are also exempt. This includes gifts to such charitable bodies as universities, national museums, and the National Trust.

Gifting is a complex area. The above information is only a very simple overview of the many ways gifting can impact Inheritance Tax liability.

You should always seek trusted expert advice before you gift.

If you need such advice, contact us today. We’d love to help.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances. 

*Trusts are not regulated by the Financial Conduct Authority.