Last week we mentioned the IHT threshold of £325,000 which is refreshed every 7 years. But did you know that it is possible to make gifts which fall outside of this threshold?
Gifts made during your lifetime are not included to the extent that they are made from your surplus income, form part of your normal expenditure (made regularly) and leave you with sufficient net income to maintain your usual standard of living.
The amount gifted or expenditure involved does not need to be exactly the same every year, as long as it has a regular pattern.
This exemption is extremely useful as it has no financial limit provided that the above conditions can be met. Common uses include paying your grandchildren’s school fees, paying monthly life assurance premiums on a policy in favour of your children or passing all of the income you receive from a trust each year to your elderly parents.
For more information, please contact Lesley Sutton on 01484 550037 or email firstname.lastname@example.org.