|
2. Use your remaining allowances effectively by making gifts
The following are examples of gifts which are tax exempt
a) Gifts up to £3,000.00 in any one tax year. If any of this allowance is unused it can be carried forward to the next tax year.
b) Gifts up to £250.00 to as many people as you wish but such gifts are only exempt if the total given to one person in a given tax year does not exceed £250.00.
c) Gifts that are part of your normal expenditure and made out of your income.
d) Wedding gifts up to the following values: Children £5,000.00, Grandchildren £2,500.00, anyone else £1,000.00.
e) Gifts to UK based charities, museums and similar other bodies.
3. Make larger transfers of capital
The Inland Revenue will permit the transfer of limitless sums to UK based individuals and these transfers of value – known as Potentially Exempt Transfers (PETs), are inheritance tax free seven years after their being made. During the interim years the tax charge may, depending upon individual circumstances, also fall. Hence, it is important that such transfers are made as early in life as possible. However, equally, you need to ensure that, in making PETs, you are at a stage in life when you can reasonably judge how much you can afford to give away without depriving yourself of the lifestyle which you would like.
4. Make use of Trusts
There are various forms of specialised trusts which can be used depending on your circumstances, some of which allow you to receive income and still make potential Inheritance Tax savings.
Contact us for more assitance. |
