25/07/23
News, Resources, Insight and Opinion from Browning Financial Planning
Inheritance Tax and Care Fees
25/07/23
Gifting money to save Inheritance Tax (IHT) and surviving 7 years is one method of mitigating Inheritance Tax, but.......
this creates further problems, the most obvious of which is being left with a lack of funds for care fees.
The other problem is having to survive for 7 years from the date of the gift. It has to be 7 years. Six and a half years is no better than one year.
A solution is to invest into an Inheritance Tax Plan, which requires you to survive for only 2 years rather than 7.
Furthermore, unlike gifting to people and trusts, you can get your money back whenever you want, whereas with gifting the money is gone forever.
In our opinion, this solution is particularly effective for older clients who need to gift money away to save Inheritance Tax, but are reluctant to do so because of the fear of facing extortionate care fees.