If you are fortunate enough to be financially secure, have more money than you need to live comfortably now and maintain your accustomed quality of life during your later years, then you may want to pass some of your wealth to your family and friends while you are still alive. Making gifts to loved ones during your lifetime can not only be rewarding but also tax efficient. It is, however, important to be aware of the rules that dictate what you can and cannot do, and the problems that can arise if you do not take proper advice.
In the first part of a two-part series of articles on this subject, Dhruva Patel, wills and probate specialist with Berry & Lamberts Solicitors based in Sevenoaks, explains why lifetime gifts might benefit you and what you can safely give away each year. A second article, in November, will look at the slightly more complicated rules around potentially exempt lifetime transfers.
Why might I want to make gifts during my lifetime?
If the net value of your estate at the date of your death is likely to exceed the value at which inheritance tax becomes payable, you may be able to take advantage of rules which allow you to gift some of your wealth during your lifetime, without paying some, or all, of the inheritance tax that would be payable when you die.
The inheritance tax rules are complicated, but:
How much can I give away during my lifetime?
You can give away:
Specialist legal advice can help you determine how to best plan during your lifetime, achieving the maximum advantage by using the various exemptions and allowances available to limit your inheritance tax liability, while still ensuring that you are able to continue to enjoy your current standard of living and meet any future care costs or unexpected expenses, should these arise.
For advice on inheritance tax planning, or any other wills, estate or probate matter, please contact Dhruva Patel on 01732 460565 or email firstname.lastname@example.org.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.