IHT & Gifts: Judge allows £6m gift
In a previous blog, we discussed how you can reduce your Inheritance Tax liability by making gifts. It really can be an effective way of reducing your estate for IHT, if done correctly.
IHT & Gifts
Interestingly, there was an article in the paper recently stating that a Court of Protection judge decided that a man is allowed to gift himself £6 million of his mentally incapacitated mother’s £18.6 million fortune, in a bid to reduce the Inheritance Tax liability on her estate.
The man’s mother is in her 70’s, suffering from dementia and in need of full time of care. She made a Lasting Power of Attorney some eight years ago, appointing her son as her sole attorney. He has asked the judge to allow him to gift £6 million to himself, to reduce the Inheritance Tax liability on his mother’s estate. He is the only surviving child and her Will leaves most of her estate to him.
The judge allowed the man to make the gift, as well other gifts to various charities. Thereby reducing the estate by £7 million. That is an Inheritance Tax saving of £2,800,000!
The judge was satisfied that the application had not been improperly brought. His mother’s longstanding financial advisor was in support of the gift. And the Official Solicitor, who helps mentally incapacitated people that are caught up in litigation and acted on behalf of the man’s mother, also backed his application.
To read the full article click here.
How to reduce your Inheritance Tax liability
There are many steps you can take to reduce your IHT liability and pass more of your wealth to your loved ones. As I said, we have already covered this topic in previous blogs and you can read them by clicking the links below:
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