MAKING cash gifts to your family could be a prudent move for anybody who wants to save them from a mammoth inheritance tax bill, according to a leading tax expert.
Mike Fleming, a tax director at Straughans chartered accountants, believes Britons should take sensible steps to reduce the amount of inheritance tax their family will have to pay when they die.
According to Mr Fleming, making regular cash gifts to family and friends throughout your lifetime is one way to reduce the overall net worth of your property.
He said: “You can, under current legislation, gift £3,000 a year, as one or several gifts. If you fail to use this exemption in one year you are allowed to carry it forward to the next year, allowing a gift of up to £6,000. Additionally, you can give small gifts of up to £250 as often as you like to as many people as you like.”
Parents can gift up to £5,000 to their child as a wedding or civil partnership gift, and grandparents can give £2,500.
Mr Fleming added: “So being generous with cash gifts to your loved ones throughout your lifetime will not only benefit them in the short term, but will also serve to help reduce your own future exposure.
“However, be careful if considering ‘gifting’ your private residence to your children as this has many complicated tax implications – make sure you seek specialist guidance first and foremost.
“Inheritance tax is a legislative minefield, and proper tax advice, on all but the simplest estates, could produce huge savings for your loved ones.”