Will writers should consider lump sum giveaway

by Sarah Ashcroft

Those writing a will can avoid inheritance tax by giving away lump sums of their wealth to loved ones while they are still alive.

Speaking on BBC Radio 4's Money Box, SavvyWoman.co.uk personal finance expert Sarah Pennells explained that Brits are allowed to give away gifts of up to £3,000 per year tax free.

The 'seven-year rule' or exempt transfer rule also enables those with financial assets to give as much of their wealth away as they wish, without paying inheritance tax, as long as they live seven years after their last gift payment.

She told listeners: "You can leave some of your money, your property, whatever you want to when you die and there won't be any inheritance tax to pay unless it's worth more than £325,000."

Brits are increasingly relying on their inheritance in the continuing, uncertain economy.

Recent research by Skipton Financial Services showed that as many as one in five UK adults requested their inheritance early from their parents to help them during financial difficulty.

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Published on: August 25, 2011

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