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Spring Cleaning for Your Tax Affairs!
Although it may not seem like Spring recently with the flurries of snow and the Beast from the East, we are now fast approaching the end of the tax year. As part of the Spring cleaning process, why not have a think about your succession planning and Inheritance Tax position?
Before the tax year comes to an end on 5th April 2018, you would be wise to consider making use of your available Inheritance Tax allowances.
These can include the ‘annual exemption’ for Inheritance Tax, which allows each individual to make lifetime gifts of up to £3,000 per tax year and for these to escape potential Inheritance Tax. It is possible for any unused portion of the annual exemption to be carried forward, but to the next tax year only, so you may wish to make use of this while you can.
Another possible exemption is that for ‘small gifts’. This allows gifts to an individual per tax year of up to a total of £250 to be exempt for Inheritance Tax. The small gifts exemption cannot be added to the annual exemption, i.e. to give one individual £3,250, but it is possible for you to give these small gifts of up to £250 to as many individuals as you like!
Finally, you may have heard of the new ‘Residence Allowance’ for Inheritance Tax, which rises from £100,000 for deaths in this tax year to £125,000 for those in the next. As a very broad overview, the Allowance may be available if you make an outright gift of your home to direct descendants on your death but beware, as what sounds fairly straightforward on paper is full of exceptions and exclusions. To ensure that you are making best use of the Allowance as it rises, there is no substitute for seeking professional advice.
For advice on your Will or Inheritance Tax position, please contact our experienced team of Wealth Management solicitors for more information.