Inheritance tax could be slashed through gifts - 'two notable buckets' you should note

Inheritance tax receipts received by HM Revenue and Customs (HMRC) increased by £100million to £1.1billion in the period of April 2022 to May 2022, figures published today show. A significant increase from the same period in the previous year, it continues the upward trend over the past decade.

As well as the threshold freeze, rising house prices means the 40 percent tax is affecting ever more families, potentially leaving a large bill for a person’s next of kin.

One way to reduce the value of an estate and avoid the tax, which applies to anything above £325,000, is through gifts.

Shona Lowe, financial planning expert with investment group abrdn, told Express.co.uk: “Some gifts are exempt, which means the value of them leaves your estate immediately.

“There are two notable buckets of exempt gifts.

inheritance tax could be slashed through gifts - 'two notable buckets' you should note
© GETTY More and more Britons are facing an inheritance tax bill

“The first will fall under the ‘annual exempt amount’, which allows you to gift up to £3,000 each year split between as many recipients as you like.

“The second falls under the ‘small gift exemption’, which allows you to make as many gifts of up to £250 as you choose in a year, as long as each one goes to a different person.”

Gifts can also be given to someone getting married or starting a civil partnership.

A person can give £5,000 to a child who is tying the knot, as well as £2,500 to a grandchild or great-grandchild, or £1,000 to any other individual.

DON’T MISSSavings warning: Avoid ‘unwise’ decision as inflation rises [INSIGHT]Prescriptions: Dental charges ‘rising well above inflation’ [UPDATE]Dave Ramsey suggests how woman, 64 with ‘virtually nothing’ can get by [VIDEO]

An individual can also give away any extra income they have, as long as there is a regular pattern of giving.

The value of these gifts will leave the person’s estate immediately.

Ms Lowe said: “If you give a gift that doesn’t fall within one of those exemptions, you will need to survive for at least seven years after giving it in order for its value to leave your estate completely.

“It’s important to highlight that gifts don’t just have to be made to other people.

inheritance tax could be slashed through gifts - 'two notable buckets' you should note
© EXPRESS The value of cash vs inflation

“They can also be made to charities, in which case they are exempt and the value leaves your estate immediately.

“They can also be made into a trust.”

IHT receipts for April 2021 to May 2022 were £1.1billion, which is £0.1billion higher than the same period a year earlier.

Inheritance tax must be paid by the end of the sixth month after the person dies.

Chancellor Rishi Sunak has been urged by finance professionals to bring in a temporary ‘gifting amnesty’, increasing the gifting allowance for inheritance tax from £3,000 to £10,000 for the next two years.

Financial group Quilter said that this would encourage older generations to pass on their wealth to their children and grandchildren without worrying about tax repercussions.

Research from the firm found that older generations have become increasingly worried about their children and grandchildren’s financial futures.

Some two-thirds of adults surveyed were “not confident” that future generations would be able to get onto the housing ladder.

More than a third were worried that their grandchildren would not be able to afford to go to university.

News Related

OTHER NEWS

Mother and six-year-old daughter are gang-raped in a moving car after accepting a lift from a group of men in India

Mother and daughter, 6, are assaulted after taking lift home from Indian holy siteAlleged driver 'Sonu' already had friends in the vehicle when they picked up pairThey gang-raped the mother and daughter before dumping them near canalMother made her way to police station and then hospital for urgent treatmentWARNING: GRAPHIC CONTENT  Read more »

Centre Court awaits: US Open winner Emma Raducanu, 19, returns to action at Wimbledon following whirlwind year since her SW19 debut - after being helped by her childhood coach in wake of injury scare

British No 1 will make Centre Court debut in opener against Alison Van UytvanckRaducanu was forced to retire from the Nottingham Open earlier this monthHas said she is ready for Centre Court and will relish the loud backing of fans   Read more »

Watch Peter Crouch In Conversation At Esquire Townhouse

© Oliver Holms The former England striker shared some well-earned wisdom from his storied football career Peter Crouch has played with a lot of players at a lot of clubs ... Read more »

Mother who suffers from incontinence makes a formal complaint after she wet herself in River Island when staff refused to let her use their toilet - and placed a 'Wet Floor' sign next to her

Bianca Artwell, 30, from Rugby, suffers from Functional Neurological Disorder Condition causes incontinence and she needed the toilet in River IslandWasn't allowed to use staff toilets and ended up wetting herself in the store River Island has apologised to Bianca after she made a formal complaint   Read more »

Police charge climate pest accused of putting a bike lock around her neck and chaining herself to the steering wheel a rental car to block traffic on the Sydney Harbour Tunnel - along nine other demonstrators

Outraged commuter erupted at climate activist who blocked traffic in SydneyMali, 22, parked her car across road leading into Harbour Tunnel on MondayAngry commuter walked up to her car window before verbally abusing her Another furious worker drove right through a group of protesters on Monday Do you know more? Contact tips@dailymail.com  Read more »

Disabled wheelchair-using grandfather, 64, had to drag himself off Jet2 flight after cabin crew refused to help him due to health and safety rules

Disabled Elliot Pinsley, 64, dragged himself off a plane at Manchester AirportJet 2 cabin crew said they couldn't help due to health and safety regulationsMr Pinsley was told it could take 90 minutes for special assistance staff to assistThe grandfather-of-four, of Salford, Greater Manchester, branded it 'disgraceful' Read more »

Patrick Vieira can now form "incredible" duo as Crystal Palace land "fabulous talent" - opinion

© Provided by Football FanCast Championship – Derby County v Coventry City Crystal Palace have completed the signing of winger Malcolm Ebiowei from League One side Derby County on a ... Read more »

Arsenal confirm third summer signing with £45million Gabriel Jesus to become number four

Arsenal have made United States international goalkeeper Matt Turner their third summer signing… with £45million Manchester City star Gabriel Jesus up next. The 28-year-old was widely expected to complete the ... Read more »

Elizabeth Warren says Supreme Court ‘burned whatever legitimacy they had’

© AFP via Getty Images US-JUSTICE-COURT-ABORTION Senator Elizabeth Warren has lashed out at the Supreme Court after it officially overturned Roe v Wade last week, striking down abortion rights across ... Read more »

Boris Johnson defends Northern Ireland protocol bill ahead of Commons vote

© Provided by The Guardian Photograph: Getty Images Boris Johnson has defended the government’s legislation disapplying parts of the Northern Ireland protocol, which will face its first hurdle in the ... Read more »

The hidden Uyghur restaurant in East London serving 'delicious, flavourful' food you've probably never heard of

It’s very easy to walk past the Etles Uyghur Restaurant in Walthamstow and not even notice. The restaurant is on the ground floor of a residential block, tightly squeezed in ... Read more »

"I’m sure..": Reliable journo drops big AVFC transfer claim, supporters surely buzzing – opinion

© Provided by Football FanCast ryan-kent-rangers-transfer-news-aston-villa-transfer-news-steven-gerrard-premier-league-transfer-rumours-scottish-premiershipScottish Cup – Final – Rangers v Heart of Midlothian Aston Villa have been handed a boost in their reported pursuit of Rangers winger and ... Read more »

Amazon Prime Day Is Soon — Here's What To Expect From The Coffee Machine Deals

1/7 SLIDES © From The Supplier Can’t function properly without coffee in the morning? Refuse to start work without your morning frapp? Always schedule in a coffee break around 3pm? ... Read more »

Surgeon says he was victim of ‘clear racial triaging’ at airport security

‘If I did that as a doctor, I would be struck off, Aali said after the incident (Picture: MEN Media/Getty) A top surgeon has claimed airport security staff singled him ... Read more »

Teen spared jail for knocking woman out when her friend grabbed a man’s backside

Fiona Hoyle, 19, was handed a suspended prison sentence for the attack (Picture: Solent News) A teenager who knocked out a woman who had challenged her friend for grabbing a ... Read more »

Richard E. Grant: What I've Learned

© Provided by Esquire (UK) The British actor on growing older, being happy and buying shoes Every boy of my generation wanted to be an astronaut when Neil Armstrong set ... Read more »

Sienna Miller and Scarlett Johansson don their Sunday best as they join blushing bride Kristin Scott Thomas for filming upcoming drama My Mother's Wedding

Sienna Miller and Scarlett Johansson donned their Sunday best as they filmed scenes for the upcoming drama My Mother’s Wedding alongside Kristin Scott Thomas in Hampshire. The trio were joined ... Read more »

Michael Vaughan: BBC staff condemn ‘damaging and embarrassing’ decision to stand by former England captain

© PA Wire England v New Zealand – Second LV= Insurance Test Series Match – Day Five – Trent Bridge Members of BBC staff have written a letter condemning the ... Read more »

Johnny Depp is set 'to return' to Pirates of the Caribbean as he's in talks with Disney about '$300 million deal' after defamation trial win against Amber Heard

The actor, 59, was the major lead in five Pirates movies over the past 15 yearsHe was dropped by the Disney franchise in 2018 after the release of Dead Men Tell No TalesA source told Poptopic that the media house is working on a '$301 million deal' to coax Depp backDepp sued Heard over the Washington Post op-ed in 2018 that didn't identify him, but clearly branded him as a domestic abuserThe Edward Scissorhands star told the jury he would not work with Disney again after executives made him feel 'guilty until proven innocent' Read more »

Alec Baldwin to interview Woody Allen

© Provided by Cover Media Alec Baldwin Alec Baldwin is to interview controversial filmmaker Woody Allen. The Annie Hall director was once one of cinema’s most revered auteurs but has ... Read more »

Nearly all children at secondary schools have Covid antibodies, figures show

© PA The survey found an estimated 99% of secondary pupils and 82% of primary pupils tested positive for Covid antibodies Nearly all secondary school-age children have Covid-19 antibodies, according ... Read more »

Dementia prevention: The cardiovascular factors that can 'greatly increase' your risk

The Alzheimer’s Society (AS) explains a person’s risk of developing dementia is the chance that they will get it at some point in their life. It saysa: “Everyone has a ... Read more »

COVID an 'inconvenience' rather than 'life-threatening' for many now, says WHO

Dr David Nabarro, WHO special envoy on COVID, tells Sky News the virus is "survivable" for most but has urged people to be "responsible" by wearing masks and social distancing to protect others. Read more »

Leggy Amanda Holden totes a novelty tennis ball handbag as she takes lookalike daughter Lexi, 16, to the first day of the Wimbledon Championships

Amanda Holden was joined by her eldest lookalike daughter Lexi as they headed to the first day of the Wimbledon Championships on Monday morning. The Heart radio presenter, 51, was ... Read more »

Gabriel Jesus puts end to Arsenal's £71m misery as Man City star finally makes decision

Arsenal have finally ended a streak of letting players leave the club for Manchester City – and this time they’re looking to make a signing of their own in Gabriel ... Read more »

'Have to be patient' - Ian Evatt opens up on two Bolton Wanderers missed transfer window targets

© James Baylis – AMA/Getty Images Ian Evatt has made three signings for Bolton Wanderers this summer. Ian Evatt has opened up on missing out on a couple of transfer ... Read more »

UK set to lose biggest microchip factory over ‘direct threat' from China: ‘It's madness'

The Newport Wafer Fab factory, based in South Wales, could be forced to relocate if the handover to Chinese buyers is not overturned, a report has revealed. Nexperia, a subsidiary ... Read more »

Man Utd squad were split over Cristiano Ronaldo and Harry Maguire captaincy row

The Manchester United squad were split over their views on the captaincy last term as Cristiano Ronaldo ‘s presence challenged Harry Maguire. The centre-half was handed the armband early in ... Read more »

Kieran McKenna provides update on Ipswich Town’s transfer decision on 23-year-old

© Provided by Football League World Championship – Bristol City v AFC Bournemouth Ipswich Town are still considering triggering their option to buy Tyreeq Bakinson, carried over from the loan ... Read more »

F1 LIVE: McLaren boss comments on Daniel Ricciardo’s future as Christian Horner criticises Mercedes ‘bias’

LIVE – Updated at 11:19 F1 is back at Silverstone this for the British Grand Prix after a weekend off following Montreal, where Max Verstappen tightened his grip on the ... Read more »

The people making a difference: meet Mr Pothole, the campaigner fixing Britain’s roads

© Provided by The Guardian Photograph: Alicia Canter/the Guardian Mr Pothole is the scourge of council do-nothings and lackadaisical Highways England engineers. As well as motorists, he worries about cyclists, ... Read more »

Heather Knight questions ‘dangerous message’ from ICC on women’s Test cricket

England captain Heather Knight has described ICC chair Greg Barclay’s comments questioning the future of women’s Test cricket as a “dangerous message”. Barclay said in an interview earlier this month ... Read more »

Walthamstow police officer claimed cops don't have to pay after not buying train ticket

A former Metropolitan Police special constable repeatedly attempted to evade rail fares claiming that she did not need to pay because she was in the force. Former SC Misbah Ishaq ... Read more »

Video: Touching moment Elvis fan, 74, with Alzheimer's comes 'back to life' when he hears his favourite songs 

Read more »

UFC 276: Israel Adesanya unleashes explosive words on Jon Jones

UFC Middleweight Champion Israel Adesanya will be taking to the octagon to defend his title at UFC 276, but The Last Stylebender had some words for former Light Heavyweight Champion ... Read more »

Princess Beatrice does 'summer casual' in £40 high street shirt dress

Princess Beatrice may be the Queen’s granddaughter, but just like many young women her age she’s partial to a good old British festival. She and her husband Edoardo Mapelli Mozzi ... Read more »

Graham Skidmore dead: Blind Date's 'Our Graham' dies aged 90 as tribute paid

Graham Skidmore, known to viewers as Blind Date’s “Our Graham”, has been remembered as a “fantastic father and husband” by his son, Neil, following his death aged 90. He became ... Read more »

Joe Locke Feels Right at Home in Dior

© Pierre Mouton Esquire gets ready with the ‘Heartstopper’ star ahead of the maison’s Paris show We’ve never had so much television. As the digital stream breaks its banks, every ... Read more »

Full House star Jodie Sweetin shares update after being shoved to ground by police at abortion rights protest

© MediaPunch/Shutterstock Jodie Sweetin – MediaPunch/Shutterstock Full House actor Jodie Sweetin is “OK” after being shoved to the ground by police during an abortion rights protest in Los Angeles on ... Read more »

Amanda Holden recreates iconic raunchy moment as she exposes bum in tiny tennis whites

Amanda Holden cheekily flashed her derrière in a photo taken in a bid to recreate Martin Elliott’s ‘Tennis Girl’. Taken in 1976, the photo was first published in a calendar ... Read more »