Tax on lifetime gifts and on death
£3,000 annual exemption.
Generally, inheritance tax is due on death at a rate of 40 per cent of the chargeable estate if the inheritance threshold is exceeded. The current nil rate band threshold for inheritance tax is £325,000. Any unused nil rate band from the first death may be transferred to the surviving spouse.
Gifts or transfers made within seven years of death are also added back into the estate and are liable to inheritance tax subject to a tapered reduction for tax on transfers between years three and seven.
You have worked hard to create your wealth - now make sure you do all you can to minimise any payments that may be due for inheritance tax. There are many opportunities to plan and the key is to plan well and ahead. Firstly, estate planning should start early in life. But, it is never too late to start.
Next, do you have an up-to-date Will - one that reflects your wishes? Are you taking advantage of the available exemptions such as the annual £3,000 exemption, gifts out of income, and gifts on marriage?
If you have any questions or queries relating to this, get in touch.