Merry and Mindful: tax-efficient giving explained

We are witnessing an historic shift in wealth; the great wealth transfer taking place is expected to see around £5.5 trillion passed down from one generation to the next by 2050.

We are also seeing record inheritance tax (IHT) receipts. IHT is effectively a death duty levied on the total value (less any liabilities, exemptions and reliefs) of an estate at the time of death.

IHT is usually paid at a rate of 40% on the value of an estate above a threshold of £325,000. This threshold was set in 2009 and is frozen up to 2028. It is no surprise therefore that people are looking to explore ways of passing on their wealth in a tax efficient way. Charitable giving through Wills is also something professional Will writers are increasingly seeing. However, giving is not always straightforward and can lead to disputes, it requires careful planning, professional advice and good record keeping to ensure the donor’s wishes are fulfilled and tax reliefs and exemptions are fully utilised.

Succession planning specialist, Ingrid McCleave talks about effective and tax efficient giving.