Inheritance Tax & Gifts

Inheritance Tax has to be paid following your death at a rate of 40% on the amount by which your net assets exceed your Nil Rate Band allowances. One way of reducing this liability is to reduce your estate by making gifts during your lifetime.

The main Inheritance Tax exemptions allowing tax-free lifetime gifts are:

  • Gifts of less than £250 each;
  • Gifts of up to £3,000 per year;
  • Gifts made out of your unspent income;
  • Wedding gifts (£5,000 for your child, £2,500 for your grandchild, or £1,000 for others);
  • Gifts made more than 7 years before your death;
  • Gifts to UK charities or political parties;
  • Gifts to a spouse or registered civil partner; and
  • Gifts of “Agricultural Property” or “Business Property” (these are narrowly defined, so you should not simply assume that a particular asset qualify for one of these reliefs).

There are some potential pitfalls you need to avoid when making lifetime gifts. For example:

  • If you give away an asset (rather than cash) you may have to pay Capital Gains Tax;
  • If you retain any benefit from the asset you gave away (e.g. keeping the income from an investment) then you will not save any Inheritance Tax, and you may make your overall tax position worse; and
  • Gifts into trusts may give rise to an immediate liability to Inheritance Tax.

It is important that you get detailed professional advice to ensure that your gifts will be tax effective. Gilbert Stephens LLP can give you that advice. We can also help ensure that your Will is tax efficient and advise upon other means of reducing Inheritance Tax liability.

Our Inheritance Tax & Gifts Team:


Richard Walford
Richard Walford

Partner - Head of Department Private Client
Exeter | Crediton
email | 01392 424242 | 01363 775566

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Claire Veness
Claire Veness

Supervising Partner Sidmouth Office
Sidmouth
email | 01395 512443

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Don Middlemost
Don Middlemost

Supervising Partner Budleigh Salterton
Budleigh Salterton
email | 01395 445581

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning

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Liz Govier
Elizabeth Govier

Supervising Solicitor Ottery St Mary Office
Ottery St Mary
email | 01404 812228

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Jamilah Pringle
Jamilah Pringle

Associate Solicitor
Exeter
email | 01392 424242

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Tim Leat
Tim Leat

Chartered Legal Executive
Ottery St Mary
email | 01404 812228

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Nysha Forsey
Nysha Forsey

Solicitor
Crediton
email | 01363 775566

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Rosy Holyer

Solicitor
Exeter
email | 01392 424242

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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