{"id":4284,"date":"2024-05-21T13:41:08","date_gmt":"2024-05-21T12:41:08","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/quilter\/?p=4284"},"modified":"2024-05-21T14:38:02","modified_gmt":"2024-05-21T13:38:02","slug":"iht-gifting-a-refresher","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/quilter\/2024\/05\/21\/iht-gifting-a-refresher\/","title":{"rendered":"IHT gifting \u2013 a refresher"},"content":{"rendered":"
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There are several ways to minimise the amount of Inheritance Tax (IHT) your family pay when you\u2019re gone. In addition to maximising IHT allowances, other planning opportunities include utilising gift exemptions.<\/strong> <\/p>\n<\/div>\n\n

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Making IHT-free gifts<\/strong> <\/p>\n<\/div>\n\n

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Each financial year you can make gifts of up to \u00a33,000 <\/strong>(in total, not per recipient) and if you don\u2019t use this in one tax year, you can carry over any leftover allowance to the next year. If you do this, you have to use up all your allowance in that tax year; you can\u2019t accumulate several years\u2019 worth of allowance and use it up in a single gift.\u00a0<\/p>\n<\/div>\n\n

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In addition:<\/strong>\u00a0<\/p>\n<\/div>\n\n

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  • Gifts of up to \u00a3250<\/strong> per person per financial year to any number of people are exempt\u00a0<\/li>\n<\/div>\n\n
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  • Each parent of a bride or groom can give up to \u00a35,000<\/strong>; grandparents or other relatives can give up to \u00a32,500<\/strong> and any well-wisher can give \u00a31,000<\/strong>\u00a0<\/li>\n<\/div>\n\n
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  • Gifts to registered charities and political parties are also exempt from IHT.\u00a0<\/li>\n<\/div><\/ul>\n<\/div>\n\n
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    There is another simple way of passing money to the next generation which allows for gifts to be made from surplus income. <\/p>\n<\/div>\n\n

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    Gifting from surplus income<\/strong> <\/p>\n<\/div>\n\n

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    If you have enough income to maintain your usual standard of living, you can make gifts from your surplus income, such as regularly paying into your child\u2019s savings account. To make use of this exemption, it\u2019s essential that you keep very good records of these gifts. The gift will only qualify for exemption if it is part of a regular pattern of giving, and if you can demonstrate that you maintained your normal standard of living after making the gifts and all other usual expenditure, if you don\u2019t, IHT might be due on these gifts when you die. <\/p>\n<\/div>\n\n

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    Conditions apply and advice would be needed to ensure that the gifts are made in the right way. <\/p>\n<\/div>\n\n

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    During your lifetime \u2013 gift exemptions and the 7-year rule<\/strong> <\/p>\n<\/div>\n\n

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    Many families consider giving their assets away during their lifetime, these are called \u2018potentially exempt transfers<\/em>.\u2019 For these gifts not to be counted as part of your estate on your death, you must outlive the gift by 7 years. If you die within 7 years and the gifts are worth more than the nil-rate band, taper relief applies, so that if you die say within 6 years, the tax will be less than if you were to die a year after making the gift. <\/p>\n<\/div>\n\n

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    Gifts must be outright and you can no longer benefit from them. So, if you were to gift your home, but continue to reside there without paying a commercial rent, HMRC would consider this to be a \u2018gift with reservation\u2019<\/em> and include the value as part of your estate. <\/p>\n<\/div>\n\n

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    A reminder<\/strong> <\/p>\n<\/div>\n\n

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    During the Spring Budget it was announced that there will be a consultation on moving to a residence-based regime for IHT. No changes to IHT will take effect before 6 April 2025, nil-rate band remains at \u00a3325,000<\/strong> and the main residence nil-rate band at \u00a3175,000<\/strong>, with taper starting at \u00a32m (estate value). <\/p>\n<\/div>\n\n

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    It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.<\/em><\/strong> <\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

    There are several ways to minimise the amount of Inheritance Tax (IHT) your family pay when you\u2019re gone. In addition to maximising IHT allowances, other planning opportunities include utilising gift exemptions.  Making IHT-free gifts  Each financial year you can make gifts of up to \u00a33,000 (in total, not per recipient) and if you don\u2019t use […]<\/p>\n","protected":false},"author":4,"featured_media":4285,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,77],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/4284"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/comments?post=4284"}],"version-history":[{"count":5,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/4284\/revisions"}],"predecessor-version":[{"id":4308,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/posts\/4284\/revisions\/4308"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/media\/4285"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/media?parent=4284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/categories?post=4284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/tags?post=4284"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/quilter\/wp-json\/wp\/v2\/hd_content_source?post=4284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}