| Are you feeling jittery in the run up to the budget on 30th October (which arguably wasn’t helped by the speeches at the labour party conference this week)? You are not alone. It is widely expected that there will be changes to inheritance tax (IHT), capital gains tax (CGT), pensiong jittery in the run up to the budget on 30th October (which arguably wasn’t helped by the speeches at the labour party conference this week)? You are not alone. It is widely expected that there will be changes to inheritance tax (IHT), capital gains tax (CGT), pensions and business rates. Added to that, talk by the labour government of the “broadest shoulders” bearing the load in the face of a £22 billion treasury black hole has many people worried. They are people who have second homes, people who have built up their pensions, people who have sensibly saved and invested their money, people who run businesses. Often referred to as ‘middle England’, such people are concerned they are going to be punished for their financial prudence by the Chancellor in the upcoming budget. So, I wanted to offer some calm and clarity before the budget, hopefully. – This email isn’t to speculate on how the IHT rules could change – we’ll know soon enough. – It’s to remind you of the action you can take now which could benefit your estate. I’m talking about gifts! The gifts mentioned below could take your money out of the IHT net for you ahead of the budget, if the shoe fits. That’s because these gifts fall outside of your estate immediately for tax purposes ergo they will not be included in the value of your estate when you pass away: 1. £3,000 annual gift exemption – you can give away up to £3,000 to one or more people e.g. your children and/or grandchildren. The allowance is available every tax year and if you didn’t use it during the previous tax year, you can bring it forward to this tax year creating a £6,000 gift instead. For a married (civil partnership) couple, this could amount to making £12,000 worth of gifts before the budget. *You get to see the money benefit your family and can ensure it’s used sensibly. 2. £250 small gift allowance – you can give £250 to as many different individuals as you want! But you can’t mix this gift with any other gift allowance. 3. Wedding/civil ceremony gifts – Do you know anyone getting married before the budget? You can give £5,000 to a child, £2,500 to a (great-) grandchild or £1,000 to anyone else. The gift needs to be made before or on the day of the wedding. Remember, these are gifts that count as being handed over immediately for IHT purposes. Think about whether you should take advantage of the existing IHT rules before any possible changes in the budget. If it’s worth pursuing, ensure: – You can afford to make the gift – The gift is not considered in isolation – the value of your estate and your personal circumstances should always be borne in mind – You have researched all suitable gifts as this is not an exhaustive list of your gift allowances or making gifts. Or you can have a chat with us – professional advice should always be sought prior to making gifts to reduce the value of your estate. If you would like to have a chat, about making a gift, simply book a consultation. This email does not constitute legal advice and is for informational purposes only. |
