Britons who receive gifts are being warned to start planning now or face “escalating inheritance tax exposure.”
Gift-recipients in the United Kingdom are being warned that they must start planning now or face “escalating inheritance tax vulnerability.”
A PROMINENT financial expert has expressed concern about the potential for inheritance tax (IHT) complications when it comes to gifts.
When it comes to IHT gifting, Simon Dawson, the Chief Commercial Officer of inheritance loan provider Legacy Release, has advised Britons to “start planning now.” Normally, the estate pays any Inheritance Tax owed on gifts.
This is not the case if the deceased gives away more than £325,000 in gifts seven years before their death.
While this is a common way to prevent the IRS from seizing one’s assets after death, experts always advise people to do their research before implementing this money-saving strategy.
In an exclusive interview with This website, Mr Dawson offered sound advice to people looking to reduce inheritance tax by making gifts to loved ones.
“When it comes to gifting to loved ones, I think the best advice is to start thinking about it sooner rather than later,” the financial expert said.
“The amount of relief you get from gifting decreases dramatically the longer you wait because there’s a seven-year taper.”
“If you can start planning seven years before you die, even if you don’t have a crystal ball, you may be able to pass on a large amount of wealth to your loved ones in the next generation,” says NSandamp;I, which rejects Premium Bonds prizes after savers unintentionally break rules.
“This is exempt from IHT because the level of Inheritance Tax exposure increases over the seven years.”
Aside from passing assets down to family members, the inheritance expert stressed that putting money into trusts can be just as complicated as passing assets down to family members when it comes to IHT.
“The next issue is that when you’re thinking about putting things into trusts, you always have to consider how that trust is constituted,” Mr Dawson continued.
“It’s also important to think about how the trust is distributed to the intended recipient, as well as getting financial advice on which trust is best for that person.”
“You can put life insurance and real estate into trusts in addition to money.”
“It’s all about recognizing who will benefit from your allowances and seeing the big picture.”
“Brinkwire Summary News” says, “It’s also critical.”