A leading Wealth Management and Wills Solicitor based in southern England recently issued an early warning that HM's Department of Revenue and Customs will soon take a series of austerity measures to address the current inheritance tax loophole. They also advise anyone who intends to donate their money as a "gift" to their family to disclose it to avoid a hefty inheritance tax bill. You can also learn more about how to avoid inheritance taxes via https://inheritance-tax.co.uk/blog/how-to-avoid-inheritance-tax/.
Image Source Google
There are currently no specific guidelines or methods for reporting pending donations at the time of their examination, which means that the obligation always focuses on the implementer to notify HMRC of all donations made during the lifetime of the deceased, especially those made during the last 7 years.
However, this rule change means that HMRC will no longer focus solely on properties that exceed zero at death (and that incur potential IHT costs). HMRC will now look further into apparently non-taxable properties to maximize "tax revenue".
Lawyers further suggest the best way to give gifts to avoid an inheritance tax bill:
If the gift is in the form of cash, checks, or even movable goods (sentimental items such as jewelry), the jewelry must also be accompanied by a letter stating that the grantor wishes to make the gift. If the value is known, it must be included in the letter along with the date and signature of the giver.
A senior manager of the lead attorney said that the whole inheritance tax process is not as complicated as it should be and if proper advice can be given it can become clearer to all parties.