Estate planning reliefs explained
There are a number of reliefs available to us all which we can use when doing any type of estate planning:
- Any unused NRB from a deceased spouse can be transferred to the surviving spouse’s Estate on their subsequent death.
- Other large reliefs are business property relief and agricultural relief however these need to be used very carefully in any type of planning.
- Married couples can transfer assets between spouses and civil partners IHT free.
- There’s a £3,000 per person allowance each tax year that can be used to gift money to anyone you choose. If this allowance was not used in the previous tax year, it may be carried forward and used after the current year’s allowance has been utilized, making it possible to gift £6,000 every other year.
- Small gift allowances of £250 which can be made to as many individuals as required but cannot be added to the annual gift allowance (i.e. one individual cannot be gifted £3,000 + £250 in one tax year and have it all treated as exempt).
- Gifts on consideration of marriage are exempt up to set limits, depending upon your relationship to the married couple.
- Gifts from normal expenditure can be exempt provided they are from income and do not materially affect the standard of living of the person making the gift.
- Gifts to charities and political parties are exempt