A prominent wealth management and wills solicitor based has issued a warning about the imminent implementation by HM revenue and customs of a stringent crackdown on current Inheritance tax gifting loopholes.
To avoid an inheritance tax bill, anyone who plans to give their money to their family "gift" should make this clear. You can find the best inheritance tax lawyer online.
There are currently no guidelines or procedures for reporting outright gifts at their point of origin. This means that the HMRC has to be made aware of all gifts made during the decedent's life, especially those made in the past 7 years.
These rules were changed to allow the HMRC to focus on estates beyond the Nil Rate Band at death. This includes any potential IHT charge. In an effort to maximize the 'tax take,' the HMRC will now look into estates where there is no tax charge.
Further, the Wills Solicitor offered advice on how to best give a gift in order to avoid an Inheritance tax bill being levied at your home:
A letter should be attached to any gift that is cash, cheque or chattel. This will let the gift giver know the intention to give the gift. If the gift's value is known, it should be noted in the letter.
A promissory note must be signed and dated by the recipient of the gift is to be used as a loan.
Avoid using "Side letters." Side letters are letters that state explicitly that the recipient and donor can both claim back the gift if the relationship is broken.
To be exempt from Inheritance taxes, the gift must not be subject to this regulation. Any letters that restrict the gift will make the gift as IHT liable.