Beat the 'death duty' through giving

On April 6th the new inheritance tax (IHT) nil band rate will jump to £300,000, meaning that now may be the time for some shrewd gifting.

As the new rate comes in, and savings and shares add to value, people in Northern Ireland and Britain will increasingly look to solicitors to make the most of their money.

By minimising the value of an estate through dedicating money to others, such as children or grandchildren, many could remain below the 'death duty'.

People with assets exceeding £300,000, including savings and shares, could opt to leave up all or part of this amount to others in a Will or an earlier lifetime gift, thereby potentially avoiding a future tax bill.

Alternatively, the money could be left in a trust - an option which would suit those with family not accommodated for in traditional law.

Co-habitees do not enjoy the same IHT relief available to married couples, which means that on death the tax-free transferral of assets is not possible. Therefore, the whole of the estate over £300,000 becomes liable for IHT and incurs a 40 per cent charge.

Couples in this situation can reduce IHT by one partner making regular gifts of money or shares.
It should be noted that from 6th April 2007 any amount over £ 9,200.00 may be subject to the annual capital gains tax.

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