There are certain types of gifts which are ignored for the purposes of the seven year period referred to above – in other words they are completely exempt from IHT and can never become an expensive dead goldfish!
There is a £3,000 annual exemption for gifts, and if it is not used it can be carried forward for one tax year.
In other words, if you haven’t made any gifts in the previous tax year then you can bring that year’s relief forward and add it to the current year so you can now make exempt gifts of up to £6,000. In this case, in the following year, you would be back down to the £3,000 exemption for that year.
If you made no gifts for example in 2012/13, then in 2013/14 you could make a gift of £6,000, which will simply be ignored as far as inheritance tax is concerned, even if you die within seven years.
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