that you can give unlimited sums to your children free of Inheritance Tax and there is no 7 year time limit?
Yes it’s true. You really can give unlimited sums to your children free of Inheritance Tax and there is no 7 year time limit or even 2 year time limit.
This is a really useful exemption but it is little understood and therefore seldom used. It’s called Gifts out of Income. If you have more income than you are currently spending, you can gift away the excess on a regular basis. Provided it does not reduce your standard of living and the gifting is done fairly regularly, the gifts are 100% exempt from Inheritance Tax. There is no limit and there is no qualifying period.
An even better idea is to invest the excess income in a whole of life policy written in Trust for your children. This satisfies the requirement for the payments to be regular and can prove a very worthwhile investment but still be entirely free of Inheritance Tax.
The other advantage is that you can change your mind at any time and even stop the payments.
If you think this might affect you or your family then simply contact us on 0800 852 1999 or contactus@mcclure-solicitors.co.uk to arrange a free no obligation chat with one of our Estate Planning Consultants.
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