13:50 05 March 2013
Every once in a while the unexpected happens and someone in your family may need financial assistance. Most of us would give that money, providing we have it, without even a second thought. If you were to die within seven years of giving a large sum of money, that person would suddenly be responsible for paying inheritance tax on the money.
Here are a few ways to give money without burdening someone with a sudden inheritance tax bill:
•Any amount up to £3,000 each year could be given up without paying inheritance tax. If you have not given gifts, whatever allowance remains of the £3,000 can be rolled over to the forthcoming year. Therefore if you gave no money one year, the following year you would be able to give a sum up to £6,000.
•Gifts to a civil partner or spouse are not subject to inheritance tax as long as they live within the United Kingdom.
•Civil partnership ceremony and wedding gifts are exempt from inheritance taxes as long as they are within the appropriate thresholds. Gifts to children should be worth no more than £5,000, gifts to grandchildren and great-grandchildren should be £2,500 or less. Any other person can give gifts up to £1,000. Certain conditions apply for promising the gift as well as date of payment.
•Regular gifts made out of your normal income (after-tax) either for maintenance or typical holidays are exempt.
If you review these guidelines and ensure that your giving is within the appropriate thresholds and timeframes, you can rest assured that they will be free of inheritance tax unless regulations change. Keep detailed records of gifts for reference.
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