Many of you may have now finished (or at least started) your Christmas shopping and will be looking forward to the Christmas break. Understandably, estate planning will not be at the forefront of most people’s minds at this time of year, but perhaps it should be?
Gifting money, property or other assets can often be a straight forward way of tax planning and making the most of the tax-free allowances available to individuals. Here are five useful allowances for gifting this Christmas:
- Small gifts exemption. Although there’s no specific tax exemption for Christmas gifts, the vast majority of presents will have no inheritance tax consequences as outright small gifts of up to £250 per recipient are exempt.
- Charity exemption. If you make gifts to charity at this time of year these are exempt from inheritance tax (as they are at any other time of the year).
- Annual allowance. Cash and assets to the value of £3,000 can be gifted each tax year. You could also bring forward last year’s exemption too if this hasn’t been used. You may decide to be particularly generous to your children or other family members and make use of this annual allowance.
- Spouse exemption. Thinking of a reason to treat your spouse or civil partner this Christmas? There need be no limits to your generosity towards them as unlimited gifts can be made which will all be covered by the spouse exemption.
- Excess income. Gifts can also be made out of any excess income that you have coming in but don’t use. Good record keeping and a pattern of regular gifting needs to be shown.
Careful planning and advice should be taken and our Wills, Trusts & Probate team can guide you through the positives and negatives of parting with your hard-earned assets.
Whatever your present buying plans, we wish you all a very merry Christmas and a happy and prosperous new year.