Gifting property to reduce inheritance tax
Whitebrook Wills - Wednesday, November 12, 2014
Gifting property to reduce inheritance tax is a popular way of ensuring that more of the money you make in your lifetime goes to your loved ones when you die, rather than to the taxman.
Gifting property to your beneficiaries whilst you're alive means that the value of your estate will be considerably reduced. If the gifts are made outright however, this does mean that you will not receive any share of the money if the property is sold, or rented out. Under the Potential Exemption Transfer rules Inheritance tax total exemption will only be granted if you do not die within seven years of making this gift.
Alternatively, the property can be part gifted, which means that you and your beneficiaries will all become part owners. In this way, the parts of the property you don't own may be exempt from IHT, but you can still receive an income.
Finally, by releasing equity on the property and gifting that to the beneficiaries, the estate loses some of its value and the property remains entirely within your ownership.
