Thinking of giving money or an asset away to a loved one before you die? Consider doing it now
There has been much speculation on what the Chancellor may or may not do in this March 2021 budget. Most of the suggestions consider the necessity to clear the huge debt this country is now burdened with due to the pandemic. Some tax planning may be too late now such as selling a second property unless you can exchange contracts before budget day on the 3rd March 2021, to avoid any increase in the capital gains tax rates.
However, here is something you can bring forward if you were going to do it anyway. Some commentators suggest that the potential exempt transfer may disappear (giving gifts during lifetime) This would mean any lifetime gift would potentially become chargeable to tax at the date of gift.
If you brought the date of the gift forward to before the date of budget, and assuming the Chancellor doesn’t back date the change, then you can use your Inheritance tax threshold (take advise for any capital gains tax issues). Surviving seven years after the date of gift would mean it drops out of your estate. The easiest item to gift would be cash of any amount.