Benefactors opting for pre-inheritance

A growing number of people are opting to give away a pre-inheritance in order to minimise their tax liabilities.

This is the conclusion of a new survey by Aviva, which shows that 46 per cent of UK adults have received inheritance money before their loved one has died.

Younger people are more likely to be offered a pre-inheritance, with 29 per cent of those aged 18 to 25 having received one.

As well as reducing the overall amount of inheritance tax that will payable on their estate, benefactors can also have a greater say on how their money is spent if they hand over financial gifts before death.

Aviva spokesman Clive Bolton said: "We are seeing a number of shifts in how people use their money in retirement, the pre-inheritance is a fairly new initiative."

Currently, individuals can pass on £325,000 worth of assets tax-free. Married couples and civil partners can share their allowances, giving them a joint threshold of £650,000. Anything over this amount is taxed at 40 per cent.

The best way of ensuring that inheritance money is left to the right people and spent in accordance with the benefactor's wishes is to write a will detailing what will be given to whom.

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Published on: April 22, 2010

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