Inheritance Tax Exemptions and Allowances

By | Gifting, Inheritance Tax | One Comment

Where clients are wishing to reduce their potential inheritance tax liability, there are lifetime inheritance tax exemptions and allowances they should be made aware of. For a number of these, they may need to seek regular advice from tax specialists to ensure that they will qualify for an exception or do not exceed an allowance. Annual Exemption Each person has an annual exemption of £3000 per year that can be gifted in any way that will not be considered for inheritance tax purposes. If the full £3000 is not used fully in that year, any unused allowance may be rolled over to the next year once. Small Gift Exemption Small gifts of £250 or less are exempt from inheritance tax. A person can make as many of these gifts as they like each tax year as long as the total amount gifted to each individual is less than £250. This…

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Review of Inheritance Tax

Chancellor requests a review of Inheritance Tax

By | Inheritance Tax | One Comment

In a letter published on the 31st January, the Chancellor of the Exchequer has requested that the Office for Tax Simplification carry out a review of the inheritance tax regime. The Chancellor has acknowledged that the inheritance tax system is complex and wished for simplification to ensure that the system is fit for purposes and operates as smoothly as possible. It is requested that the review considers: Technical and administrative issues, such as the process of submitting returns and paying any tax due Practical issues around routine estate planning and disclosure How current gift rules interact with the wider inheritance tax system and whether the current system causes distortions when making decisions about transfers, investments and other transactions. A document covering the scope of the review will be agreed and published by the Office for Tax Simplification in due course. This request for a review comes less than a year…

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