The new tax year is nearly upon us. This brings increased tax exemptions and allowances. However one tax allowance that seems to be consistent in value is the annual exemption which has remained the same since April 1982. It is available to anyone domiciled in the UK.
Did you know that you can give away (if you are in a financially able to) £3,000 per tax year without any inheritance tax consequences. This is known as the annual exemption. Up to £3,000 per year can be gifted to one individual or split between several individuals. If you haven’t done so for the previous tax year, you can make a backdated gift to make the most of this however this can’t be carried forward to the next tax year.
As a probate practitioner, I often see estates where the possibility of making the most of annual exemptions has not been utilised. On the other hand, I’ve seen estates where the gifting is very regular. If you are in a position to make gifts, it is most helpful to the Executors of an estate if there is a clear record of the gifts made and the exemption that has been applied. This should confirm who received the gift and the date of it. This makes the declaration to HMRC much more straightforward, and less of a headache for your Executors.
If you would like to review your Will and discuss Estate Planning generally please contact our Wills and Estate Planning Team on 01256 320555. If you quote this article we can offer you a complimentary 30 minute appointment to see me or one of my colleagues in the Wills and Estate Planning Team.
Wills and Estate Planning Solicitor