Inheritance tax is set at 40 percent and is made payable on the value of an estate above a certain threshold - usually £325,000. Many people loathe the idea of paying Inheritance Tax, usually due to viewing it as a “death tax” when they have already paid other levies throughout their lifetime. For those who want to reduce or totally eliminate their Inheritance Tax bill, though, action will need to be taken.
He said: “Most people aren’t aware they can gift money away to people on marriage, and that gift to potentially be exempt from Inheritance Tax with immediate effect.
“A gift is anything with value, such as money, property or even possessions such as jewellery or art.
“Any individual can gift an amount of up to £1,000 per person - so that can be anyone - completely exempt from tax.
“For a grandchild or great-grandchild, the amount is increased to £2,500, and if it is your child, you can gift £5,000.
“This isn’t restricted to how many children you can give this to, or how many people - you can make the same value of gifts to each of them, even in the same year and it would be allowed.”
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Mr Platt also highlighted another aspect of gifting, which is known as the small gifts exemption.
Individuals are able to give as many gifts of up to £250 per person as they would like in the same tax year.
This is the case as long as another exemption has not been used on the same person.
But looking at the bigger picture, there is also the annual exemption to take into account when thinking about gifting.
Mr Platt continued: “Anyone can gift a capital value of up to £3,000 per year, and that is within your annual gifting exemption with no IHT.
Although a gift can be an expression of love, congratulations, or otherwise, it can also serve as a perfect way for someone to avoid a tax bill, thus making it a win-win situation.
Mr Platt concluded: “The Government actually classifies Inheritance Tax as a voluntary tax for people.
“This is because while people are alive there are a lot of actions which can be taken to help to reduce the liability down - potentially to even nothing.
“But as we know, the vast majority of people are not actually taking any action at all when it comes to their estate.
“This may be because they haven’t had any access to advice, or they end up leaving it too late.
“The older you become, the fewer options which are on the table for you to use.
“So the real call to action here is to either seek advice, or investigate your options and take action sooner rather than later.”
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