High numbers unaware of IHT gifting rules
Recent research4 has revealed that just 45% of people looking to gift money are aware of the rules and exemptions surrounding Inheritance Tax (IHT).
Only a quarter (25%) of respondents admitted to possessing a ‘working knowledge’ of the rules surrounding gifting. The rules relating to gifts can appear confusing and if you’re unsure of the tax implications then it is always best to seek advice.
4IFS and the National Centre for Social Research (NCSR), May 2019
Banking on an inheritance?
arious patterns seem to be emerging in how wealth is transferred down the generations. It comes as no surprise that gifts and loans are more commonly made to a younger demographic. Parents are stepping in to help their offspring with times of major expense, like buying a house or getting married. Research has shown that in the last two years, 11% of those aged between 25–34, received over £500, with the average across all age groups totalling £2,0005.
Inheritances coming later
Across all age ranges, the average inheritance during the previous two years was £11,000. Those aged between 55 and 64 are most likely to receive larger inheritances, receiving £33,000 on average. The average amount inherited by those aged 65 and over was £20,000; this money was invested or saved by 49% of recipients.
Stand on your own two feet
With gifts often made earlier in life, inheritances could be smaller in the coming years. The research highlights that people who are dependent on receiving an inheritance instead of putting pension provision in place might find they’ve reached retirement before they inherit, so don’t neglect your own retirement plans.
5ONS, Oct 2018
It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
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