Inheritance Tax

Don’t waste your gifting opportunities

There are few more confusing – or unpopular – taxes than Inheritance Tax (IHT). But continued confusion and inertia means that HM Treasury can expect to see a 25% increase in IHT revenues over the next five years.3

However, there are a number of exemptions that allow individuals to reduce future bills. Perhaps the best known is the annual gifting allowance. This gives individuals the opportunity to remove ￡3,000 of assets from their estate immediately (￡6,000 if they use the previous year’s unused allowance as well).

Taking steps to reduce your taxable estate by topping up a child’s pension or Junior ISA could go a long way to providing them with an invaluable head start in life. Nevertheless, with the end of the 2017/18 tax year looming, you only have a short amount of time to make this year’s ï¿¡3,000 gifting allowance count – and to carry forward last year’s, if you haven’t used it already.

It’s a time of the year when individuals and couples are given an opportunity to put their long-term plans back on track by using reliefs and allowances that would be otherwise lost.

Nevertheless, legitimately protecting wealth from HMRC requires some knowledge and expertise to do it effectively. That’s why you should speak with a financial adviser to better understand how you can get maximum advantage for this year and the years to come.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA. The favourable tax treatment of ISAs may not be maintained in the future and is subject to changes in legislation.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

1 CBOE Volatility Index (^VIX), accessed 18 January 2018

2 Personal Pensions Statistics, HM Revenue and Customs, September 2017

3 Office for Budget Responsibility, March 2017