Lifetime Gifts

Gifts during Lifetime can be exempt from Inheritance Tax (IHT), potentially exempt or be a chargeable lifetime transfer:

Exempt Gifts

  • Unlimited between spouses/civil partners
  • £3,000 annual exemption (can carry forward for 1 year max)
  • Gifts out of normal expenditure (must be able to maintain standard of living)
  • Gifts on marriage (£1,000 to anyone, £2,500 to a grandchild, £5,000 to a child)
  • Gifts to help with another persons's living costs i.e. childcare and elderly relatives
  • £250 to any amount of people
  • Gifts to registered charities and political parties - unlimited

Potential exempt transfers (PETs)

  • Gifts to individuals
  • Gifts into bare/statutory trusts and trusts for vulnerable beneficiaries
  • NB: These will be fully exempt of IHT if the person gifting survives 7 years. If the death occurs within 7 years they will either be chargeable or use up the Nil Rate Band (£325,000)

Chargeable lifetime transfers (CLTs)

  • Any gift that does not fall into the above two categories is a CLT
  • For example gifts into discretionary trusts
  • NB: If these gifts were in excess of the available Nil Rate Band there will be a 20% lifetime tax charge. If they survive 7 years, there is no further tax to pay

4 March 2019

The views expressed in this blog do not in any way constitute advice and are specific to the date noted. As time passes the facts can change and readers should consult their adviser for up to date advice on any matters covered within the blog. Invest Southwest offers an initial review, which is free of charge, however long it takes. From this we will be able to confirm how we can help and give you an opportunity to decide if you would like us to. Thereafter, we will provide you with detailed recommendations and exact costs. Please note that we promise not to levy any kind of fee unless we can demonstrate a benefit to you.

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