Inheritance Tax and Lifetime Gifts
Common exemptions to Inheritance Tax (IHT):
- Gifts between spouses (Except if a British domicile passes his estate to his or her non domicile spouse, where the allowance is the Nil Rate Band (NRB) plus £325,000, presently £650,000)
- Gifts to charities and political parties (Go to the gifts to charities page to understand how the reduced rate of IHT at 36% applies if you make charitable gifts, which might well reduce the overall cost to your net estate)
- Annual gifts of £3,000 per donor (Therefore, a husband and wife can give away £6,000 each year)
Potentially exempt transfers (PETs)
Unlimited gifts to individuals (For example to your children, provided that you see no further benefit and live for a further 7 years)
Transfers to trusts for the benefit of others
Transferring assets to trusts for the benefit of others (excluding your spouse), of up to the present Nil Rate Band (£325,000) every 7 years. Husband and wife can gift up to £650,000 each for the benefit of their children and grandchildren every 7 years.
The above list is not exhaustive and we recommend that you contact us for further information on your particular situation.
Click here if you would like a conversation with one of our advisers on Inheritance Tax
