Will all my gifts be effective for UK Inheritance Tax?

If you give away an asset and retain any interest in it, the asset will fall foul of anti avoidance legislation and will always remain in your estate.

Many believe they can give away a house but still live in it. This will be ineffective for UK Inheritance Tax and the whole gift will fall back into the estate.

Moreover, in some circumstances, a gift with strings attached might give rise to an Income Tax charge on the donor based on the value of the benefit they retain. In this case the donor can choose whether to pay the Income Tax or have the gift treated as a gift with reservation.

This doesn’t need to happen with careful Inheritance Tax planning advice.

Other Inheritance Tax frequently asked questions:

• Does a Will help my Inheritance Tax Planning?
• How much is my estate worth for Inheritance Tax?
• How soon will Inheritance Tax have to be paid?
• What Inheritance Tax planning exemptions do I have?
• What is a potentially exempt transfer?
• Will all my gifts be effective for UK Inheritance Tax?
• If I am making gifts or gifts into trusts which order should I do them in?
• If I have an existing trust, do I need to do anything about it?
• If I made an outright gift of over the nil rate band, would I pay any immediate inheritance tax?