Inheritance Tax Give Away Before You Die?

[poppet2]

Wouldn't that be the easiest solution to just give your loved ones their share of your inheritance before you die?

Surely that way, those who you leave your inheritance to, would avoid the 40% death duties.

[Jim Hardie]

Just make sure you don’t die within seven years.

 

[Al Bundy]

I've already given my loved ones a share of my future lump.

 

All 5 of them spent it on a Gregg's sausage roll each.

[Longcol]

19 minutes ago, poppet2 said:

Wouldn't that be the easiest solution to just give your loved ones their share of your inheritance before you die?

Surely that way, those who you leave your inheritance to, would avoid the 40% death duties.

Not applicable on the first £325,000 you leave.

[Annie Bynnol]

As Jim says there is a seven year rule. Trying to give away assets like house, car, money, caravan, yacht etc. would be seen as avoiding tax, as would undervaluing these assets.

You can give gifts up to a total value of £3000 per year. 

As many gifts of up to £250 per person as you want.

If a friend or close relative is getting married you can give up to £5000.

The Inheritance tax allowances are £325 000 to anybody and £500 000 if the house is left to your children.

There are ways to reduce tax if resident children continued to live their for seven years.

You could set up trust funds.

You could ask a relative to move in permanently and thus reduce the tax on the house.

Charity is tax exempt as are political parties(!)

Edited January 2, 2023 by Annie Bynnol
numbers

[ab6262]

43 minutes ago, poppet2 said:

Wouldn't that be the easiest solution to just give your loved ones their share of your inheritance before you die?

Surely that way, those who you leave your inheritance to, would avoid the 40% death duties.

set up a trust with a solicitor it safeguards, money  property and assets up 1 million.

[poppet2]

2 minutes ago, ab6262 said:

set up a trust with a solicitor it safeguards, money  property and assets up 1 million.

Does this allow you to ignore the 7 year rule?

[ab6262]

3 minutes ago, poppet2 said:

Does this allow you to ignore the 7 year rule?

speak to your solicitor but as i understand its in addition to that, we did it when my father died a couple of years ago and my mothers assets  etc are in trust for us siblings up to 1 Million.

[poppet2]

24 minutes ago, Annie Bynnol said:

 

The Inheritance tax allowances are £325 000 to anybody and £500 000 if the house is left to your children and nothing to pay if the children lived there before continued to live their for seven years.

 

But would all the children who inherited, have to live there, both before a parent's death and then 7 years after?

[Jeffrey Shaw]

The seven-year rule is subject to a sliding scale of amounts disregarded ("Taper Relief").

As far as I know- the rule does change from time to time!- Taper Relief exempts certain proportions of lifetime gifts which are Potentially Exempt Transfers. If one survives:

more than 6yrs but less than 7yrs: relief 80%

more than 5yrs but less than 6yrs: relief 60%

more than 4yrs but less than 5yrs: relief 40%

more than 3yrs but less than 4yrs: relief 20%.