Inheritance Tax - live for 7 years

[lynbrown]

My husband and i are giving our kids some money to reduce our savings below the IHT limits. Do both of us have to live for another 7 years to avoid them paying tax on it or is it enough for one of us to survive?

[Buenchico]

There's never any inheritance tax to be paid when the first partner in a marriage dies, so HMRC will only seek to levy IHT upon the death of the second partner. Thus, it seems that the succession period relates only to the longest-surviving partner.

Remember that both you and your husband can each make gifts of up to �3000 per year without any succession period applying. (It's sometimes better to give the money away in instalments than in one go).

IHT is a complex matter and, with a reasonably large estate, it's probably worth paying an experienced professional for some expert advice.

Chris

[kempie]

Further to the exemplary answer given by Chris you may like to read the HMRC guide to IHT - here.

[dzug]

It is not true to say there is never any IHT on the first death - yes, true for any assets going to the surviving spouse, but for assets passing to others then there is IHT if the estate is large enough.

The 7 year rule will apply to whoever makes the gifts. If they are jointly given, then 50% of the gift will be regarded as given by each of you unless there is evidence to the contrary.

So you both have to survive, but the amounts payable, if any, will be smaller after the first death if it occurs sooner.