How to Minimise Inheritance Tax

Giving it all away, as The Who’s frontman Roger Daltrey sang in 1973, is one way to stop your estate being clobbered by the taxman.

Not surprisingly, Her Majesty’s Revenue and Customs are wise to that ruse and have rules in place to ensure the flow of inheritance tax they receive is not reduced to a trickle. Handing over all your money to your children while on your deathbed, for example, would not work.

But there are ways of minimising the effect of inheritance tax if your estate is likely to be worth more than the £325,000 threshold. Anything passed to a husband, wife, civil partner, charity or political party is free of tax. Anything gifted more than seven years before you die is also exempt.

Within 7 years of your death, certain gifts are allowed. Parents can give children up to £5,000 as a wedding present, Grandparents can hand over £2,500. Anyone else can give £1,000.

Also, the first £3,000 given away each year is exempt and unlimited presents of up to £250 are allowed as long as they are not to the same person.

For expert help with the probate process, contact Heritage Will Writing on 02380 879243.