Jon Golding looks at the exempting of IHT gifts made out of excess normal income claims to reduce an inheritance tax liability.
Many people have excess yearly income, which can usefully be classed as gifts of income and as such can form excess ‘normal expenditure’ out of income within IHTA 1984, s 21(1).
In effect, if it can be shown as an excess of income surplus to requirements for the usual standard of living and gifted, it is exempt from inheritance tax.
