If you are looking to support family members during the cost of living crisis, here is a reminder of the types of gifts you can make without Inheritance Tax concerns:
- Spousal transfers (this is restricted if your spouse is non-UK domiciled)
- The annual exemption of £3,000 (if unused the prior year exemption can be brought forward as well)
- Regular gifts out of excess income
- The £250 annual small gift exemption (if exceeded it cannot be applied)
- Gifts in consideration of marriage or civil partnership (values range from £1,000–£5,000 dependent upon the nature of your relationship to the recipient).
Transfers of cash or assets which are not protected by any of the above are likely to be considered Potentially Exempt Transfers. These transfers take a full seven years to be removed from your estate, using the nil-rate band if you pass away before the seventh anniversary.
If transferring assets remember there might be other tax implications as well, such as Capital Gains Tax.
If you are in a position to help family members and would like to discuss your plans, please do get in touch.