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It has been said that for the wealthy, IHT is a voluntary tax, and there is some truth in this. For example, if you have a large annual income, there is another useful exemption for IHT. Essentially, this says that gifts you make are ignored for IHT if you can show that:

•    you make them using part of your annual income after tax;
•    making them does not affect your standard of living - in other words, if you didn't make the gift, you'd be saving the money rather than spending it; and
•    you make them regularly – for example every month, or every year.

It is wise to get expert advice on how to set up an arrangement that will qualify as “normal expenditure out of income”, as the detailed rules are rather complicated.