At this time of the year, most of us turn our attention to our yearly ‘to do’ list. I’m willing to wager that for many of you that includes making a will and looking at your inheritance tax position.
It is often said that inheritance tax is voluntary and with careful planning it’s possible to reduce the amount of tax your estate pays or even avoid it completely.
Certainly, making sure your will is up to date is a good starting point, but so is taking proper professional advice about what other things can be done, such as making gifts to your children and grandchildren during your lifetime.
Gifts made to celebrate marriage are completely tax free up to a certain limit, as well as gifts of up to £3,000 per year per donor and gifts made out of income rather than capital. No need to survive the usual seven years in these cases, though we sincerely hope you do!
Family trusts can be very useful when looking to make gifts to minors or to those who may not be able to manage their own money. They can also be used to shelter business assets and protect against divorce or bankruptcy, as well as reducing the overall inheritance tax burden for generations to come.
So, this New Year, make sure you know what you need to be doing to protect your estate and your family from unnecessary tax bills on your death.