If I mention inheritance as a tax to be aware of  quite a few of the people for whom I work, my family and my friends would probably laugh and add the comment “Oh I’m not wealthy enough to worry about that”. My response is quite simply “Don’t be so sure of that”.

Inheritance tax is charged at 40 per on the value of estates in excess of a threshold of £325,000 or, in the case of a married couple and civil partners, £650,000 and has been frozen at that level mainly due pressure exerted by the Liberal Democrats.

Now if you have got this far into my blog you may decide to stop reading thinking that your estate will never exceed the thresholds. But here I would like to caution you and urge you to read on.

It is a fact that in the financial year to April 2014 £3.4 billion in inheritance tax was received by Her Majesty’s government, a jump of nearly 9 per cent on the year before. You may be wondering how that could have happened and if you just take a look at the rise in property prices – indeed consider the current value of your home. Now are you so sure this tax is something you can happily ignore? If the answer is “No” or “I’m not sure” then read on for some ideas on how to minimise your exposure to inheritance tax.

• You can give cash gifts of up to £3,000 per annum which are exempt from inheritance tax when you die. This yearly amount can be carried forward, but only for one year, after which it is lost.

• If you have children you can give them £5,000 on marriage, their grandparents can give £2,500 and anyone else up to £1,000, all of which will be inheritance exempt.

• Small gifts of up to £250 a year can also be made to as many people as you like.

• You can make a gift of any amount you wish, for example, to help your children get onto the property ladder, and provided you live for another 7 years after making this gift then it will not be included in your estate on death.

• Your assets can be put into a trust and therefore be excluded from your estate. There are too many types of trust to go into in this blog but any good tax adviser would be able to assist you.

• If evidence can be provided to HMRC that for the seven years prior to your death you made gifts which were made out of your normal income and which did not affect your usual standard of living, you can claim an exemption from inheritance tax for those gifts.

• Make sure that you have made a will, it is astounding how many people do not have a will. If you die intestate and your assets end up going to a number of relatives, other than your wife/husband, then inheritance could be payable.

• If you cannot avoid inheritance then you may want to consider making provision for it now. This can be achieved by taking out a life assurance policy written in trust and your tax adviser or financial adviser will assist you with this.

A difficult subject to address at any time in your life but one which we all need consider as, like tax, death is a certainty.

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