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Inheritance Tax worries?

With our children living longer let alone our grandchildren Enable IFA’s of Bishops Stortford know we want to make the most of what we have to help them. Currently an individual can pass on an estate worth up to £325,000 without any inheritance tax applying. If an estate – including any assets held in trust and gifts made within seven years of death – is more than the threshold, inheritance tax will be due at 40% on the amount over the current £325,000 limit.

Gifts made to a child’s pension however have the potential to qualify for a number of inheritance tax exemptions, including:

• Gifts of up to £3,000 each tax year are exempt from inheritance tax – making a gift of £2,880 (the maximum net pension contribution) to a child or grandchild’s pension an ideal way of making use of this exemption

• Gifts of up to £250 to an individual in a tax year can qualify as inheritance tax exempt payments

• Regular gifts made from an individual’s net income can qualify as inheritance tax exempt payments

If a parent or grandparent gifts any monies that are not covered by these exemptions IHT will only apply if the parent or grandparent dies within seven years of the gift being made.

By setting up a pension for a child, a parent or grandparent can help them on the road to a comfortable retirement and vitally may encourage the saving habit that their children will continue once they become an adult. Looking to the long term is something we as experience Independent Financial Advisors at Enable like to help with.

Free Consultation

Call Enable FLP today on 01279 755 950 to book your FREE consultancy and to find out how we can make your money work better for you. Alternatively, send us a message by clicking here and one of our financial experts will call you back