​ Tax Planning Idea - Using lifetime gifts to family and friends to save IHT

​ Tax Planning Idea - Using lifetime gifts to family and friends to save IHT

There are many statutory exemptions and allowances that enable taxpayers to make gifts that can mitigate IHT including:

  • Regular gifts made by an individual out of surplus income (i.e. income they don’t need to live on). If the level of surplus income is high, then the quantum of gifts made can be correspondingly high;
  • Annual gifts of no more than £3,000 out of capital;
  • Wedding gifts of varying amounts according to the relationship between donor and donee;
  • Small gifts of up to £250 to an unlimited number of individuals.
  • Many people will have heard of and used the 7 year rule. If someone makes a gift and survives 7 years then it becomes exempt from IHT. This can be a good idea, but it is a huge oversimplification to rely on this because there are pitfalls to avoid using this approach and other potential ideas that can be also used. If the intention is to start to make lifetime gifts, then a proper lifetime giving strategy should be considered.

    As always, the key to successful tax planning is to seek advice as early as possible.

    If you would like more information, or would like to discuss your tax affairs in more detail, please don't hesitate to contact our Tax Partners, Steve Crompton or Lucy Williams, on the details below:


    Steve Crompton
    Partner – Head of Tax
    direct dial: 01942 292541
    mobile: 07790 840394
    email: steve.crompton@jsllp.co.uk


    Lucy Williams
    Tax Partner
    direct dial: 01942 292543
    mobile: 07807 053494
    email: lucy.williams@jsllp.co.uk






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