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Is gifting really over?

Could you save tax by making use of your allowances this year?

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

The festive period already seems a long way behind us. But you can keep the goodwill going by giving gifts all year round. It’s just one way to take care of your loved ones and help reduce potential inheritance tax (IHT) at the same time.

If you’re thinking about estate planning and IHT, the first step is to find out if you’ll be affected. Not everyone will be.

The first £325,000 of assets are normally exempt from IHT, as well as assets passed to a surviving spouse or civil partner. For home owners, more might be exempt if the home is passed to a direct descendant. Anything above this is usually taxed at 40%. Remember tax rules can change and any benefits depend on personal circumstances.

If you’d like to work out whether you’ll be affected by IHT, download our guide.

With just under three months until the end of the tax year, now could be the perfect time to review your financial arrangements.

This article and guide are not personal advice. If you are unsure how to proceed, seek advice.

Five ways to make gifts

  1. Annual exemption - each tax year you can make gifts up to the annual exemption of £3,000. On top of this, any unused exemption from the previous tax year can also be used. So, a couple could gift up to £12,000.
  2. Gifts from income - you can make regular gifts from income. They must be from your post-tax income, habitual, and leave you with enough income to maintain your standard of living.
  3. Marriage gifts - parents and grandparents can make one-off gifts when their children, grandchildren or great grandchildren marry (up to £5,000 and £2,500 respectively). And you can gift up to £1,000 to anyone else getting married.
  4. Small gifts - each tax year you can gift up to £250 to any number of people, as long as they haven’t received any other type of gift.
  5. Donations to charities or political parties - gifts to these types of organisation, either during your lifetime or from your estate, are always exempt from inheritance tax.

For more tips, download our guide to saving inheritance tax.

Making a record of gifts will help whoever oversees your estate

Our award-winning advisory service can help you record gifts in the best way, and advise you on the implication and timing of them.

IHT planning can become quite complicated. If it isn’t planned well your loved ones could lose out on thousands.

If you’re thinking about your potential IHT liability, you should speak to an adviser. There are situations where IHT could be due on the gift you make, and the IHT on your estate could increase. For example, if you died in the seven years following making a substantial gift.

A financial adviser can help you navigate the rules, and reduce the potential loss to tax.

We never assume you need financial advice

Our starting point isn’t to assume you need financial advice. Instead we’ll help you decide if you need advice in the first place.

It starts with a quick call with our advisory helpdesk. There’s no pressure and it only takes a few minutes to find out if you’ll benefit. If it sounds right for you, we’ll arrange your free first meeting with an adviser.

Book your call back

Or get started straight away by calling us on 0117 317 1690 (Mon - Fri, 8.30am - 6pm).

There’s no obligation to take financial advice afterwards, but if you’d like to there will be a charge, typically 1-2% of the portfolio value for one-off advice.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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