Cash gifts good for private wealth?

Private wealth management could be boosted by cutting inheritance tax bills through understanding the rules on cash gifts, an expert has claimed.

Inheritance tax applies to the value of assets on death, as well as cash gifts during a person's lifetime, Jane Baker revealed on finance website Love Money.

However, gifts to a spouse or civil partner, charities and national institutions such as museums, universities and the National Trust are all exempt.

Similarly, regular cash gifts can be given tax-free to anyone, provided they do not come out of savings and do not negatively affect the payer's standard of living.

Another way to remove tax from the equation is to pay directly into another person's pension - anyone is allowed up to have up to £3,600 gross added to a pension plan per year, including children.

There are also annual exemptions for gifts of up to £3,000 per year which are tax free, plus an unlimited amount worth £250 or less.

Tricia Phillips in the Daily Mirror recently pointed out that setting up life insurance cover through a trust can also reduce inheritance tax.ADNFCR-2318-ID-800301142-ADNFCR