Inheritance Tax receipts rise – 6 ‘legitimate’ options to reduce bill
Make a will
Making a will is the first step people should take. Without it, an estate will be shared according to a set of pre-determined rules. That means the taxman might end up with more than its fair share.
Use the gift allowances
Every year individuals can give up to £3,000 away tax free. This is known as the annual exemption. If someone didn’t use it last year, they can combine it and pass on £6,000.
People can also give up to £250 each year to however many people they wish (but only one gift per recipient per year) or make a wedding gift of up to £5,000 to their child; up to £2,500 to their grandchild; up to £2,500 to their spouse or civil partner to be and £1,000 to anyone else.
Beyond these allowances, people can pass on as much as they like IHT free. So long as they live for at least seven years after giving money away, there will be no IHT to pay.
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