There is a way to increase the amount you can give away each year without incurring a potential inheritance tax liability: Carl Lamb explains how regular gifts out of income can be used for estate planning purposes.
Making gifts to family and loved ones is a simple way to reduce your inheritance tax liability on death. However, substantial gifts that exceed your annual allowance may not be considered as having left your estate if you die within seven years of making the gift. The gifting rules allow for each individual to give away up to a total of £3,000 each year plus any number of small gifts of up to £250 per person per year. Wedding gifts are also exempt; parents can give up to £5,000 each to the happy couple, grandparents up to £2,500 and anyone else up to £1,000. In addition, there are other ...
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