The potential of exempt transfers

TAX

Inheritance tax breaks can be achieved by means of exempt transfers, which apply in a number of cases including wedding gifts, life assurance premiums, and gifts to family, the nation or a political party.

Inheritance tax (IHT) breaks can be achieved by means of gifts which are exempt transfers within the provisions of Part II of the Inheritance Tax Act 1984, sections 18-29. But most transfers use the spouse exemption, which just defers the IHT problem until the second death. The Government has not changed the fixed amount of the exemptions since IHT was introduced in 1986 - 18 years ago. During this period inflation has increased by 96% but the allowances have not increased at all. What can you do during a lifetime to make the most of exempt transfers? With these gifts there is no element o...