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Tax-Free Family Gifts: What You Need to Know

Making Tax Free Gifts that Avoid Inheritance Tax
Making tax-free family gifts is something that you may wish to consider sooner or later. Obviously, the amount you decide to give and the item is ultimately up to your discretion. However, what exactly is termed to be “tax-free” and how can you be certain that you are approaching this task correctly? Let’s take a closer look.

The 7-Year Rule For Tax-Free Family Gifts

While there are many more stipulations to be found at the official UK government website, regarding Tax-Free Family Gifts, one main point to keep in mind is that any gift which is given 7 or more years before you die will NOT be subject to any inheritance tax. While you will never know when your time comes, if you are in reasonably good health and are reasonably young, you should be in the clear in regards to inheritance tax.

Regarding Inheritance Tax

Assuming that you are a parent, you are able to give a child a one-time gift of up to £5,000 pounds. This will be completely exempt from any inheritance tax. Should you be a grandparent or great-grandparent, these levels are £2,500 and £1,000 pounds respectively. Finally, you are also able to allot a gift of up to £3,000 pounds during any given year without having to be concerned about inheritance tax.

These are only two of the most common situations which may involve tax implications. For more information, it is wise to speak with a financial adviser or to refer to the previously mentioned governmental portal. If you are concerned about how life assurance plans and other packages may fall into this category, please do not hesitate to fill out our online contact form and request further information. Making tax-free family gifts to your family is a great way to show them how much you care. Just make sure that you are starting off in the right direction!

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