Most lifetime gifts are treated as potentially exempt transfers (PETs) for Inheritance Tax (IHT) purposes. In general, these gifts become fully exempt if the donor survives for seven years after making the transfer. If death occurs within seven years, the gift may become chargeable, with taper
Making gifts during your lifetime can be an effective way to reduce the value of your estate for Inheritance Tax (IHT) purposes.
One of the most commonly used exemptions is the annual exemption. This allows an individual to give away up to £3,000 each tax year without the gift forming part of their
The settlements legislation is designed to ensure that where a settlor retains an interest in settled property, the income arising is treated as the settlor’s income for all tax purposes. A settlor will be treated as having retained an interest where the settlor, or their spouse or civil partner,
The 7-year gift rule is still an available option for those making lifetime gifts, offering a way to potentially reduce Inheritance Tax (IHT) liability. Most gifts made during a person’s lifetime are not immediately subject to tax. These transfers, known as ‘potentially exempt transfers’ (PETs),
As a general rule, someone who inherits property, money or shares is not liable to pay tax on the inheritance itself. This is because any Inheritance Tax (IHT) due is normally paid out of the deceased’s estate before assets are distributed to beneficiaries. However, the recipient may be liable to
The government recently announced significant changes to the planned reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR). The threshold for 100% relief will be increased from £1 million to £2.5 million when the changes take effect from 6 April 2026. The change will be
Agricultural and business property relief changes that were first announced at Autumn Budget 2024 will come into effect from 6 April 2026. These measures will introduce significant reforms to Business Property Relief (BPR) and Agricultural Property Relief (APR), which provide Inheritance Tax (IHT)
The 2027 reforms will shift more responsibility to personal representatives, who may need to manage withholding arrangements and settle any IHT before pension benefits are released.
From 6 April 2027, most unused pension funds and death benefits will be included in IHT, meaning that more pension
Certain buildings, land, works of art, and other objects of national significance may be exempt from Inheritance Tax and Capital Gains Tax (CGT) when they are transferred to a new owner. This exemption applies under a special tax relief for national heritage assets that are either gifted or
Gifting assets can cut inheritance tax, but traps like “gifts with reservation of benefit” may undo the plan.
The majority of gifts made during a person’s lifetime are not subject to tax at the time they are made. These lifetime transfers are known as "potentially exempt