Slash Your Inheritance Tax: Simple Gifting Strategies Revealed

Inheritance Tax Savings: How Regular Gifting Can Reduce Your Tax Bill The UK government recently reported record-high inheritance tax receipts. However, many are unaware of strategies to mitigate this tax. A recent video by Antonia Investing highlights how regular gifting can significantly reduce inheritance tax liabilities. The video details three key strategies: utilizing the annual exemption of £3,000, making regular gifts from surplus income, and gifting smaller amounts to multiple individuals. By consistently using the annual exemption over seven years, individuals can gift £21,000 tax-free. Additionally, regular gifts from surplus income are immediately exempt from IHT, provided they are part of a regular pattern, come from income, and don't affect the donor's lifestyle. Gifting £10,000 annually for seven years could save £28,000 in tax at a 40% rate. Small gifts of £250 to six people each year add up to another £10,500 in tax savings over seven years. Antonia Investing emphasizes the importance of keeping detailed records to prove gifts originate from surplus income. She states, "It's crucial to keep detailed records to prove that these gifts were from surplus income." The combined strategies could save up to £37,000 in inheritance tax. With pensions now included in estates for inheritance tax purposes, estate planning is more important than ever. Understanding these strategies can provide significant financial relief for families.