Inheritance tax (IHT) planning is generally not related to the tax year end, although this is as good a time as any to review your will and ensure your stated wishes are up to date.
There are, however, certain IHT exemptions that are related to the tax year.
- Gifts totalling up to £3,000 in a tax year are exempt from IHT. If you didn't use this exemption in 2022/23, you can make IHT-free gifts of up to £6,000 before 6 April 2024. If you have already used your exemption for 2023/24, you could delay your next gift until after 5 April 2024 to take advantage of the 2024/25 exemption.
- Gifts of up to £250 to any person in any one tax year are exempt. You can use this exemption for any number of different recipients.
- Regular gifts out of excess income can also be exempt, with the amount of excess income determined each tax year. You need careful documentation to prove that you make the gifts from income rather than capital.
Useful link: HMRC guide to IHT.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
