Inheritance tax planning advice offered

Major new advice on inheritance tax planning was issued today by Equity Partners.

The financial adviser pointed out that the issue of ’gifting’ - where a property-owning parent gives financial support to one of their property-buying children - can have complex tax implications.

Moving money out of an estate is a commonly-used way of avoiding having to pay the tax - which is charged at 40 per cent on the assets of a deceased party worth above £325,000.

Included in these estates is not just its value when the estate holder died, but the value of any gifts made within seven years of the death.

Kevin Tooze, managing director at Equity Partners, said that gifters should avoid moving more money out of their estate than the current inheritance tax rate threshold.

Transfers above this limit are subject to so-called ’lifetime gifting taxation’, which is for the parent effectively like paying inheritance tax before they die.

’Don’t fall foul of gifting more than the middle rate band, otherwise you could fall foul of lifetime gifting taxation, and a periodic ten year tax on that money as well,’ Mr Tooze said.

The expert added that the tax authority, HM Revenue & Customs, made £2.2 billion in the past year through inheritance tax payments alone.ADNFCR-2318-ID-19300355-ADNFCR