Docklands Solicitor

- A question we are asked on a daily basis, as the Government (through HMRC) has been very active over the last few years in finding ways of clamping down on any way people can avoid paying tax. In practical terms ‘tax-avoidance’ is legal, whereas ‘tax-evasion’ is not!


General ‘lifetime gifts’ which are free from Inheritance Tax (IHT) liability are:

- Gifts to spouses / Civil Partners

- Wedding gifts of up to £5000 to each of your children/step children/adopted children or their fiancé

- Wedding gifts of up to 2,500 to each grandchild or their fiancé and £1000 wedding gifts to anyone else.

- Maintenance payments by court order

- Other gifts of up to a maximum of £3000 each tax year, and any unused balance from the previous tax

year

- As many small gifts of up to £250 to other people per tax year

- Gifts to: Charities, Housing Associations, Political parties, Museums, Universities, and The National Trust.

Reduced rates of IHT are payable for gifts made within seven years of death that are above the Nil Rate Band of £325k, as follows:

- 0-3 years - no reduction

- 3-4 years - 20 per cent reduction

- 4-5 years - 40 per cent reduction

- 5-6 years - 60 per cent reduction

- 6-7 years - 80 per cent reduction

- over 7 years - no tax paid

Rachael Rodgers (Will writing and Estate Planning) Tel: 07841 868 828

Labels: charities, civil partners, lifetime gifts, spouses, tax avoidance, tax evasion