The Financial Conduct Authority does not regulate advice on Estate Planning or Inheritance Tax Planning.
In the Summer Budget 2016, the rules on Inheritance tax changed, providing for an additional “family home” allowance where an individual’s main residence forms part of their estate. In 2019/20 while the Inheritance Tax threshold remains unchanged on 2018/19 at £325,000, the family home allowance has increased from £125,000 to £150,000. Individuals can now pass on assets – which include the family home – to their children or grandchildren worth up to £475,000, with no Inheritance tax liability.
Certain lifetime gifts can be made without giving rise to an inheritance tax charge. For 2019/20 the annual gift exemption is £3,000 and it is worth considering making a gift of this amount if you are in a position to do so.
In addition, if you did not make use of any part of the £3,000 annual gift exemption to which you were entitled for 2018/2019, then this can be utilised before 5th April 2020. Please note that any unused allowance for the earlier tax year must be used before the current year’s allowance. It can only be carried forward for one year and then, if unused, it is lost.
Unlimited gifts can also be made in the form of Potentially Exempt Transfers (PETs). Provided you live for 7 years after making the gift, it will be free of inheritance tax.
Please ensure that, should a gift be made by cheque, sufficient time is given for the cheque to clear before 5th April; otherwise it will not be included in the current year’s total.
Gifts of £250 can be made to any number of separate individuals without giving rise to an inheritance tax charge. Gifts of varying amounts can also be made between family members on the occasion of a wedding/civil partnership ceremony, without any inheritance tax liability.
Tax advice which contains no investment element is not regulated by the Financial Conduct Authority.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
This article is intended to provide a general appreciation of the topic and it is not advice.
For more information please contact Oakwood on 01483 266666 or email firstname.lastname@example.org and we will be happy to assist you.
Article expiry: 05 Apr 2019