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Legal News | 11.07.24

Is your estate planning The Weakest Link… goodbye?

Reportedly, Anne Robinson, best known for hosting The Weakest Link, has gifted some of her £50M fortune in a bid to reduce her estate’s Inheritance Tax (“IHT”)  liability.

Anne has reportedly made non-exempt gifts referred to as Potentially Exempt Transfers (PETs).  If that is the only planning Anne has put in place and she survives more than 7 years after making all PETs, they will become exempt and there will be no IHT considerations for her estate.

However, if Anne were to die within 7 years of making a PET it would be taken into account when calculating the IHT due as a result of Anne’s death.  If, as we may suspect, Anne has made PETs in excess of her nil rate band (currently £325,000) then IHT in relation to those gifts falls due, and following her death that IHT is payable by the gift recipient(s).

IHT due on the gifts will, however, benefit from taper relief provided that Anne survives at least 3 years from the date of the gift.  The taper relief applies so that the IHT on the PETs is reduced on a sliding scale from 40% (death before 3 years has elapsed) to zero (death after 7+ years).

Don’t let estate planning make you the weakest link.

 

Posted By Our Wills, Tax, Trusts & Probate Team