Know it all about Inheritance Tax gifts

Posted by Bluebond Tax Planning on January 28th, 2021

Can an individual give money as gifts to avoid inheritance tax? If the total value of your estate exceeds more than £325,000 and £650,000 for married couples and civil partners, then the heirs and the beneficiaries will have to pay taxes when the benefactor passes away. Inheritance Tax gifts can help one to save their hard-earned money and avoid paying inheritance taxes.

One of the easiest ways to ensure that you are not charged for taxes is by giving away assets when you are still alive. You can give some gifts to individuals even after you die. These gifts can also be kept away from inheritance taxes. Examples of such gifts include gifts made to your spouse or civil partners. This also includes money that you would leave for charitable organizations. Gifts given to individuals seven years before the death of an individual will also be exempted from inheritance taxes. However, if you make Inheritance Tax gifts within seven years of your death, it might be included for inheritance tax purposes. This type of gift is known as potentially exempt transfers. The tax is payable depending on how long you survive after giving the gift. There are different tax amounts that you need to pay when an individual dies seven years after making the gift.

An individual can give up to £3,000 in total per year for every year that you are alive. The unused part can be carried forward to the next year. This means that in the next year, the total will be £6,000. This kind of gift is known as an annual exemption. As a couple, you will be able to gift £6,000. If you have not given any gifts the previous year, then you can give £12,000 in this current year. This is quite a big amount and you can make use of it as a couple.

This is a very tricky area. Consulting a professional is also a good idea to know about which gifts are included in Inheritance Tax gifts. Having an idea about the gifts will be very helpful while making gifts. This will cause fewer problems for the people to whom you will be giving the gifts. They will know beforehand whether they will be liable for inheritance taxes or not.

As a common man, having a complete idea about the Inheritance Tax gifts is not possible. Taking the help of a professional is of much help for the people. They will be able to provide you with the best ideas and you can decide what type of gifts you want to make to save yourself from inheritance taxes. They also provide customized solutions as per the needs of the clients. This is of much help for the people. They can use these expert ideas and then implement them in the better management of their property and assets.

These are some aspects of Inheritance Tax gifts that you must know about. Having a complete idea will be beneficial for you in the long run.