Following our theme of the seven deadly sins of tax planning, or in other words seven key things to make sure that you avoid prior to the 5 April 2019, this week we consider…..not making annual gifts to reduce your estate for Inheritance tax.
We all have an annual allowance that we can use to make gifts to reduce our estate for IHT purposes, without this being added back into our estate if we die within 7 years.
The allowance is currently £3,000 per tax year. If the allowance is not used in whole or in part, it can be carried forward to the following tax year only, then it is lost.
You can also make as many gifts of up to £250 as you like, but this is an exemption not an allowance. If you gift £400 to one person, the £250 does not apply to reduce the value of the gift for IHT purposes down to £150.
For more information, please contact Lesley Sutton on 01484 550037 or email firstname.lastname@example.org.