Mark McLaughlin points out that significant inheritance tax savings are attainable simply by making lifetime gifts within certain limits.
The KISS principle (keep it simple, stupid) is generally helpful (albeit rather disparaging!) when it comes to inheritance tax (IHT) planning. This is because IHT planning is more complicated than it needs to be in many cases.
For example, significant IHT savings are possible simply by making regular use of available reliefs and exemptions, such as the annual exemption, the IHT nil-rate band, and potentially exempt transfers (PETs).
1. Annual exemption
Transfers of value (e.g., gifts) are generally exempt from IHT, up to a maximum of £3,000 per tax year.
Any unused annual exemption can be carried forward to the following tax year (but not beyond).
