Half of all adults have received pre-inheritance

A new survey has revealed that 46 per cent of all adults in Britain have received a sum of money from their parents known as a 'pre-inheritance' - essentially, receiving a portion or all of their intended inheritance before the death of their parents in order to get around paying inheritance tax. A similar survey in 1991 showed that just 2 per cent of adults had received such a gift.

If the gift is made at least seven years before the death of the donor(s) inheritance tax will not be payable. The tax would be payable at 40 per cent above the tax-free band of £325,000. The full amount of tax will be payable if the donor dies within three years of giving the 'pre-inheritance', and the amount of tax due will reduce by 20 per cent every year thereafter.

Experts say that a longer life expectancy has also contributed to the growing practice of giving 'pre-inheritances'. Inheritance money has largely been used in the past to help people get on the property ladder, to pay for education, and to help reach various other milestones. As people are living longer, inheritance money is sometimes not reaching heirs until they are already significantly advanced in age themselves, and the moment at which they could have most used financial assistance has already passed.

Anyone planning to gift a significant amount of money before their death should carefully consider their own economic needs, bearing in mind how long they could feasibly live to and viewing their wealth in that context. If you require help or information with tax planning, contact Wilson Nesbitt solicitors in Belfast or Bangor by email at estates@wilson-nesbitt.com .

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