{"id":43114,"date":"2023-09-13T14:59:21","date_gmt":"2023-09-13T14:59:21","guid":{"rendered":"https:\/\/cabanesetcompagnie.com\/?p=43114"},"modified":"2023-09-13T14:59:21","modified_gmt":"2023-09-13T14:59:21","slug":"inheritance-tax-britons-could-save-thousands-by-avoiding-common-tax-traps","status":"publish","type":"post","link":"https:\/\/cabanesetcompagnie.com\/world-news\/inheritance-tax-britons-could-save-thousands-by-avoiding-common-tax-traps\/","title":{"rendered":"Inheritance tax – Britons could save thousands by ‘avoiding common tax traps’"},"content":{"rendered":"

<\/p>\n

As the cost of living continues to bite, parents and grandparents may be more inclined to gift to their children, however many are warned not to fall into \u201ccommon inheritance tax traps\u201d.<\/p>\n

Over one-third of retired people said they\u00a0have given, or plan to give, gifts of \u00a35,000 or more, according to research by Hargreaves Lansdowne.<\/p>\n

This is likely to include those who are now keen to use them to help their family and not pay more inheritance tax (IHT) than they need to.<\/p>\n

Just under half of parents with children in the household have given gifts of more than \u00a35,000, or plan to do so.<\/p>\n

Parents seeing the rising cost of living making things\u00a0tougher for their children may even feel willing to gift more.<\/p>\n

<\/p>\n

If someone is thinking about passing on some of their wealth, experts at Hargreaves Lansdowne have explained there are seven ways they can do it to \u201cavoid tax traps and gifting glitches\u201d.<\/p>\n

1. Use a Junior ISA<\/h3>\n

As Britons don\u2019t pay inheritance tax on any gifts they give five years, it could be useful to gift to children under 18.<\/p>\n

In the 2023\/24 tax year, you can add up to \u00a39,000 into a Junior ISA for a child,\u00a0which can be saved or invested tax efficiently.\u00a0<\/p>\n

2.\u00a0Consider a Lifetime ISA<\/h3>\n

Once children reach 18, it\u2019s possible to super-charge that gift by putting up to \u00a34,000 a year into a\u00a0Lifetime ISA\u00a0\u2013 within their overall \u00a320,000 annual\u00a0ISA allowance. Lifetime ISAs are available for people aged 18-39 and contributions can be made up to age 50. This will be boosted by the 25 percent government bonus, adding \u00a31,000 for every \u00a34,000.<\/p>\n

Don’t miss… <\/strong>
Forgotten weapon to beat Hunt\u2019s inheritance tax and capital gains tax raids[INSIGHT] <\/strong>
100% inheritance tax would cause \u2018misery\u2019 while rich dodge levy[ANALYSIS] <\/strong>
Calls to scrap ‘political’ inheritance tax rule and hike bills by up to \u00a3140k[LATEST] <\/strong><\/p>\n

<\/p>\n

3. Consider insurance for potentially exempt transfers<\/h3>\n

If people give larger gifts, and they don\u2019t live for at least another seven years, they can fall back into their estate for IHT purposes.<\/p>\n

Britons can consider a life insurance policy to cover their entire potential tax liability, including these gifts. This should be written in trust, so it falls outside of one\u2019s estate, and there\u2019s no IHT to pay on it.<\/p>\n

Taking advantage of the rules around gifting could significantly reduce a person\u2019s inheritance tax bill, as this enables them to transfer wealth outside of their taxable estate.<\/p>\n

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n

Gifted transfers exempt from a person\u2019s estate and are therefore ignored by IHT, include:<\/p>\n