12 Top Tax Tips to Easter – #9 Avoid the IHT charge

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The run-up to Easter is the perfect time to consider tax planning opportunities and to put in place strategies to minimise tax before the new tax year starts on 6th April 2016. That’s why we have launched a series of 12 top tax tips to help you mitigate your tax bill.

Good planning and careful timing are critical if you want to maximise tax reliefs or minimise the tax bill on a transaction or investment, and to avoid falling foul of the system of penalties and interest levied by HM Revenue & Customs (HMRC).

As Easter is approaching fast, it is already time to reveal our 9th tax tip. It is focused on inheritance tax.

#9 Avoid the IHT charge

  • You can make gifts up to £3,000 each year free from IHT. You can make as many gifts of up to £250 each as you like to other recipients as well as gifts on marriage.
  • Regular gifts that are ‘normal expenditure out of income’ may be made IHT free. Seek advice from us before embarking on this plan to ensure those gifts are free from IHT.
  • Make IHT free investments. If you own a business or invest in unquoted trading companies, you may be entitled to 100% IHT relief with Business Property Relief (BPR). Investments based on property hardly ever qualify for BPR, so consider changing your portfolio.
  • Draw up a will otherwise the intestacy laws may dictate how your assets are distributed to your family without reference to your wishes. A good will should minimise tax and give your family flexibility and protection and may even let them save tax in future.
  • If you leave at least 10% of your net estate to charity your executors will only have to pay a reduced rate of IHT of 36% (rather than 40%).

Tax is a complex matter, so we recommend that professional advice is sought when considering any of the above. Our highly qualified and experienced tax team would be happy to discuss your tax affairs with you.

If you have any questions regarding your tax affairs, please do not hesitate to contact our tax team on 01491 579740.