FACT FOUR:

You can’t just give away assets on your death bed to try and avoid HM Revenue & Customs. A slice of the value of any gifts made within seven years of a death may well be included in estates for tax purposes – the assets will be treated as ‘potentially exempt transfers’. The longer it is since you made them the less tax will be due and after seven years they are disregarded.



Other gifts are ignored from the start, including gifts to charity, gifts made for marriages or up to £3,000 a year of other gifts. More details of all of this are available from the Government. Look at www.direct.gov.uk and search under inheritance tax.

Buy Shares

Families who have left making gifts too late to avoid inheritance tax are now buying shares.

Investments for a trust plan are offered by several companies nowadays, but they can still be a gamble. The invested money is spread over a list of companies and a portfolio built. A long as this is kept for two years any growth will be exempt from tax.

Even if the investor dies in less than two years the portfolio may be passed to the spouse of partner and at the end of two years will become tax-free.

The only danger that could arise is if caught up in the government’s review of private equity breaks thought this is being focussed more on Capital-gains tax rather than inheritance tax relief.

The capital would not be guaranteed as the market is volatile but a portfolio would have to drop by 40% or more to lose the Inheritance tax benefits.

Share such as property finance and mining are generally not eligible.