Tax-efficient giving during your lifetime is a crucial component of estate planning, helping to minimize your potential inheritance tax (IHT) liabilities by benefiting your loved ones. By strategically using available allowances and exemptions during your lifetime, you can ensure that more of your wealth is passed on to your family rather than lost to taxes. Our recently released Spotlight guide outlines the fundamental principles of tax-efficient lifetime gifting.
Many current allowances and exemptions have remained unchanged for several years:
- The Annual Exemption, set at £3,000, has been in place since 1981. Adjusted for inflation, this amount would be equivalent to £11,813 in 2024.
- The Small Gifts Exemption, allowing gifts of up to £250 to any number of individuals each tax year, was introduced in 1995. Considering inflation, £250 back then would be roughly equivalent to £501 today.
With the October budget approaching, there are expectations for potential changes to these allowances and exemptions. The CKLG team will be monitoring developments closely as speculation continues ahead of the budget announcement on October 30.
